Charles Schwab is mostly known for investment management, but its banking arm, operating under Charles Schwab Bank, offers interest-bearing checking and savings options. The firm started in April 1971 as First Commander Corporation with a corporate name change to Charles Schwab & Co., Inc in 1973. Today, most customers may use Schwab’s online options, although there are nearly 360 brokerage branches across 48 states (all except Alaska and North Dakota).
- Pros and Cons
- Company Overview
No monthly fees or minimum opening balance requirement for checking and savings accounts
Unlimited ATM fee rebates worldwide and no foreign transaction fee for checking and savings accounts
Easy to move money between investments, savings, and checking accounts
More banking services (including home loans) than some other online trading platforms
Low rates for CDs, checking accounts, and savings accounts
Checking account must be linked to a brokerage account
CD marketplace may be complex for some
- Official Website www.schwab.com/bank
- Bank Product Offerings Savings accounts, checking accounts, certificates of deposit (CDs), credit cards, brokerage accounts, margin loans, robo-investing, home loans, personal lines of credit, retirement accounts, small business retirement accounts, trusts, estate and charitable accounts, educational accounts, custodial account annuities
- Customer Service Available by phone (888-403-9000) 4 a.m. to 8 p.m. Pacific, Monday through Friday, and 6 a.m. to 7:30 p.m. Pacific on Saturdays and Sundays. Online chat representatives also available 24/7.
- Year Founded 1971
Who Is Charles Schwab Bank Best For?
Charles Schwab Bank calls itself the “bank for investors” and should appeal to those hoping to move money between different types of accounts, including savings, checking, and brokerage. It may also be a good fit for customers who want to:
- Travel abroad and access their funds without paying expensive ATM and foreign transaction fees
- Earn some interest in checking accounts
- Receive unlimited ATM fee rebates
- Active investors who want a combination of liquidity, $0 equity trades, and more than 13 different investment products
What Does Charles Schwab Bank Offer?
As you might expect from a financial institution of its size, Charles Schwab offers a considerable number of accounts and services.
- Savings account
- Checking account
- Certificates of deposit (CDs)
- Credit cards
Schwab Bank High Yield Investor Savings Account
The high yield savings account offered by Charles Schwab pays 0.05% APY for all customers.
- No minimum deposit required for opening
- No monthly fee and no minimum balance requirements
- Unlimited ATM fee rebates worldwide
- Mobile check deposit
- FDIC-insured up to $250,000
Schwab Bank High Yield Investor Checking Account
When you open the High Yield Investor Checking account, you’ll simultaneously open a linked Schwab One brokerage account to ease the transfer of funds, but you’re not obligated to fund the brokerage account. Your checking account also comes with these features:
- Unlimited ATM fee rebates worldwide, and no foreign transaction fees
- Withdraw up to $1,000 per day from ATMs, and spend up to $15,000 per day
- It can be used with Apple Pay, Google Pay, and Samsung Pay
- Free standard checks and unlimited free check writing
- Bill pay options
- Ability to avoid overdrafts through Schwab’s “Target Balance Transfer” feature
- FDIC insured up to $250,000 in the event of a bank failure
- The checking account pays 0.03% APY (variable), which isn’t as attractive a rate as that offered by high yield savings accounts, but it’s decent for a checking account with no fees, no minimum balance, deposit requirements, or tiers to keep up with.
Insufficient funds fees are $25 per item, up to $100 per day. This is lower than average.
Certificates of Deposit
Charles Schwab acts as a virtual middleman for various CDs from other banks; Schwab customers can use the Schwab CD OneSource online to compare rates and terms and purchase CDs. However, the CD rates are far lower than what you’d find with other online banks.
Deposits start at $1,000 and increase in $1,000 increments with terms ranging from one month to 20 years. You’ll receive a notification when your CD reaches maturity so you can access your funds or reinvest into a new CD.
Many financial institutions allow you to withdraw from a CD with a penalty if you need your funds before maturity. However, Schwab requests bids on your CD and contacts you with the highest bid offered plus interest. You may not receive the amount you originally paid for the CD.
The bank includes a selling concession in new issue CDs for online and broker-assisted trades. Secondary trades are charged a $1 transaction fee per $1,000 CDs. Broker-assisted trades are charged the online price of $25 per trade service charge.
Like your checking account deposits, CDs are FDIC-insured at each bank up to $250,000. You can extend your FDIC coverage by buying CDs across multiple banks through Schwab.
|Charles Schwab Bank CDs as of July 2021|
|Term||Rates up to (APY)|
Charles Schwab offers just two credit cards: a premium credit card for investors and a travel credit card.
- Schwab Investor Card from American Express
- American Express Platinum Card for Schwab
Other Financial Products From Charles Schwab
Charles Schwab also has a wide range of other offerings:
- Brokerage accounts
- Margin loans
- Home loans
- Personal lines of credit
- Retirement accounts
- Small business retirement accounts
- Trust, estate and charitable accounts
- Educational accounts
- Custodial Account
Charles Schwab Customer Service
In J.D. Power’s Direct Banking Satisfaction Study, Charles Schwab Bank ranked highest in overall satisfaction in 2019 and 2020, earning an "among the best" (5-star) rating. Customers were happy with the website, in particular. However, J.D. Power did note that direct banking customers surveyed in the 2020 study reported significantly longer wait times than the 2019 data when contacting call centers, a trend from which Charles Schwab was not exempt.
Customers can reach Charles Schwab's customer service by using the online chat or calling a toll-free number. Dedicated financial consultants are available for those with $250,000 or more invested with Schwab. Additional fees and commissions may apply, and the consultants are paid through a base salary and commissions on service and solutions offered, and are not fee-only advisors.
Charles Schwab offers a mobile app allowing iOS and Android users to manage their accounts, deposit checks, transfer funds between accounts, execute trades, and more. Charles Schwab tied with Wells Fargo for the best wealth management app in J.D. Power’s 2019 Wealth Management App Study. Its ranking dropped slightly in 2020, but Schwab's app still achieved a "better than most" (4-star) rating that landed it among the top five.
How to Bank With Charles Schwab Bank
New customers can open an individual or joint checking account online or by calling 1-800-540-6718 and make the initial deposit in the following ways:
- Mobile check deposit
- Transfer from a linked Schwab One brokerage account
- Direct deposit
- Transfer from another bank
- Mailed check using a free postage-paid envelope
- Wire transfer from another bank
In our review, we found that Charles Schwab is a great option for the brokerage’s current customers who want to earn a little interest on their cash reserves while receiving FDIC insurance for those funds. It’s also an attractive option for those who wish to move between liquid/cash and investments with a brokerage offering free stock and ETF trades, which also offers full service and robo-investing. In addition, those looking for a break on ATM fees, especially while traveling internationally, would benefit from unlimited ATM fee rebates. With no minimum deposits, monthly balance requirements, or account maintenance fees, both the checking and savings account options are worthwhile considerations.
Opening a savings account isn’t the easiest process for existing or new Charles Schwab customers. The savings and CD APYs aren’t competitive compared to other high-yield savings accounts.
J.D. Power. "In Direct Bank Gold Rush, Top Performers Find Different Paths to Success, J.D. Power Finds." Accessed April 27, 2021.
J.D. Power. "Direct Banks Earn Higher Customer Satisfaction than Traditional Retail Banks, But Face Call Center Challenges, J.D. Power Finds." Accessed April 27, 2021.
J.D. Power. "Wealth Management Apps Underperform Other Consumer Financial Apps, J.D. Power Finds." Accessed April 27, 2021.
J.D. Power. "Wealth Management App Use Surges among Investors, But Satisfaction Lags, J.D. Power Finds." Accessed April 27, 2021.