Charles Schwab Bank Review

The Charles Schwab Corporation, headquartered in San Francisco, was founded in 1971 by Charles Schwab. The company has grown from a small firm offering discount brokerage services to a leading investment services firm with 365 branches in 45 states, 12 million active brokerage accounts and client assets totaling $3.75 trillion. In 2003, the company launched Charles Schwab Bank, which now has 1.3 million banking accounts and is ranked 13th on the list of largest banks in the United States.

The bank pays top-notch interest rates on checking and savings accounts and certificates of deposit (CDs), but customers must also have a brokerage account with Charles Schwab to link to their bank accounts. Linked accounts make it easy for clients to manage their investment and banking needs with a single log-in.

Charles Schwab at a glance

  • High yield APY and exemplary customer service
  • No monthly fees or account minimums
  • Unlimited ATM fee reimbursement
  • Difficult to deposit cash
  • Can’t open accounts online
  • $1,000 minimum balance on CDs


What’s interesting about Charles Schwab Bank

Charles Schwab Bank is financially solid with an A2 Moody’s financial rating and an “excellent” financial health rating from Bauers. Over the years, the bank has proven to be customer-centric and technologically innovative. In 2019, the bank was named to the Fortune Top 50 list of “World’s Most Admired Companies.” On average, the bank pays better rates than its competitors, does not charge monthly fees and does not require account minimums.

When a customer opens an account, Schwab also opens a brokerage account for them, though the customer is not obligated to use it. For customers who bank and invest with Schwab, the linked accounts make it easy to manage all their funds. Customers rate the bank’s IOS and Android mobile app highly. Support is offered through various channels, including 24/7 chat, a call center and Twitter.

Things to consider

One big drawback with Charles Schwab is that accounts cannot be opened entirely online. Customers must download an application and either fax it or send it in, which takes more time. When opening an account, the bank will pull a hard credit inquiry from one of the consumer credit rating agencies. Also, customers who aren’t comfortable using mobile apps and who do not live close to a local branch may find it frustrating to do business with the bank. Depositing cash can be difficult. Customers have to purchase a money order or convert their cash into a check and then send it in via mail or a mobile check deposit.

Checking and savings accounts

Customers can make deposits via direct deposit, mail, mobile app or at one of the bank’s 365 local branches. Compared to competitors, the Charles Schwab Bank offers a higher APY on their High Yield Investor Checking account, regardless of the balance. There are no monthly fees or account minimums, which makes this account a better option over other online checking accounts that charge monthly fees and have minimum balance requirements. Checking and saving accounts are also linked to the customer’s Schwab brokerage account.

Customers love Schwab’s ATM fee reimbursement program on both checking and savings accounts, which deposits ATM fees from domestic and global banks back into the customer’s account each month. The bank does not charge foreign transaction fees for money withdrawn while abroad.

The High Yield Investor Savings account rate is only a little higher than competitor accounts, but it is part of the ATM fee reimbursement program, making it attractive to travelers who often aren’t in the vicinity of their bank’s ATMs.

Money market accounts

The Charles Schwab Bank offers a money market account with no minimum initial deposit and no monthly fees. The money market account must have a balance of $1 to earn interest. Schwab pays slightly lower interest rates than other online only money market accounts, with current rates ranging from 1.3% to 2.23%. All accounts are insured by the FDIC, so funds up to $250,000 will be protected. Unfortunately, there aren’t many other bells and whistles with this account, so it may not be the best option for those who are serious about growing their financial health.


Charles Schwab Bank brokers CDs through its CD OneSource program, allowing clients to compare rates from banks across the United States. Schwab does not charge a purchase fee for each CD. Instead, the bank receives a distribution payment from the issuing deposit institution. Each CD requires a minimum of a $1,000 investment, and CD amounts must be deposited in $1,000 increments. The CDs typically earn higher rates than some of Schwab’s other products.

Credit cards

The Charles Schwab Bank offers two credit cards from American Express: the Schwab Investor Card and the American Express Platinum Card for Schwab. To apply for either card, a customer must have an eligible Schwab brokerage account.

There is no annual fee for the Investor card, and American Express will automatically deposit 1.5% cash back for purchases into the customer’s eligible Charles Schwab brokerage account. While cardholders earn a $100 card statement credit after spending $1,000 in purchases in the first 3 months of card membership, this offer may not be much better than credit card offers from competing banks. Along with other perks, customers also enjoy purchase protection and worldwide customer service, including 24/7 dining and events assistance.

Though the $550 Platinum annual fee is hefty, the customer will receive 60,000 American Express Membership Rewards points after spending $5,000 in the first 3 months. Each American Express Membership Rewards point can be redeemed for deposits into a Schwab brokerage account at a rate of $0.0125 each. Because cardmembers also get special airline perks, this card is great for someone who travels often.

Personal loans

It seems that Charles Schwab does not offer personal loans, but it does offer personal lines of credit. Like a hybrid of a loan and a credit card, a line of credit is a set amount upon which you can draw cash. Charles Schwab requires an initial draw of $70,000 before smaller amounts can be drawn. The interest rates a lot lower than a traditional personal loan, coming in between 1.75% and 4.50%, depending on how much you draw. Furthermore, you only pay interest on what you draw. So if you only use $70,000 of a $200,000 limit, then you only pay interest on the $70,000.

Mortgage loans

Partnered with Quicken Loans, Schwab offers both conforming mortgage loans and jumbo loans. For conforming, standard mortgage loans, Charles Schwab’s rates are just a tad higher than average, but it offers available rate discounts and a wide variety of term options, from 5/1, 7/1 to 10/1 ARMs and 7/1 and 5/1 interest-only ARMs alongside 10- to 30-year fixed terms. It’ll be easy to find a term option that fits your financial situation and future goals with homebuying when applying through Charles Schwab.

Mortgage refinancing

Charles Schwab offers a ton of different options for mortgage refinancing, including a promotion that offers lower interest rates to customers who have qualifying assets with Schwab. What that means in layman’s terms is that customers who want a purchase or refinance loan are eligible for an interest rate discount of 0.250% to 0.750% if they have investment assets with Schwab worth $250,000 or more. That’s a hefty amount of money, sure, but the discounts are available for all adjustable-rate mortgage loan sizes and selected jumbo fixed-rate loans.

But even if you don’t have qualifying assets with Schwab, their mortgage rates are still worth a look. All of their mortgage loan rates are under 4% APY — even the jumbo loan options.

Home equity loans and HELOCs

Schwab has paired up with Quicken Loans to create its home equity lines of credit, which have a 10-year draw period, 20-year repayment period, and there are no pre-payment penalties or balance requirements, either. You’ll have the option to close quickly on your HELOC, and your interest rate will be competitive compared to what’s offered by the other larger financial institutions — as of mid-November, Schwab was offering 5.49% APR on standalone HELOCs and 4.50% APR on piggyback HELOCs.

Car loans

It seems like Charles Schwab offers everything in finances, from investing to retirement to banking to homebuying. The one thing it doesn’t offer is car loans. For competitive rates, fast funding and a trusted lender, look into LightStream, the lending arm of SunTrust Bank (soon to be Truist after a merge with BB&T Bank).

The final word

The Charles Schwab Bank is great for consumers who also use their brokerage account with the bank, as the bank’s intuitive website makes it easy to manage all investment and banking needs with a single sign-on. Overall, the higher interest rates and lack of fees and minimums mean most customers can invest and bank without a concern that their investments are being chipped away at. Customers have access to immediate service support through various online and phone options, but difficulties making cash deposits can make this bank a nightmare for more traditional banking customers.