Charles Schwab vs Interactive Brokers: Which Broker Should You Use?

Charles Schwab vs IBKR

Picking the wrong broker can turn trading from exciting to frustrating FAST. From fees to tools to market access, the broker you pick should make trading smoother—not more complicated.

That’s why I created this in-depth comparison of Charles Schwab and Interactive Brokers.

Whether you’re just starting to explore trading or you’re a seasoned day trader looking for advanced features, this comparison will help you figure out which broker works best for you.

Disclaimer

Trading carries significant risks, including the potential loss of your initial capital or more. Most traders lose money, and trading is not a guaranteed path to wealth. Products like FOREX and CFDs are complex and involve leverage, which can magnify gains and losses. CFD trading is banned in many countries, including the United States.

Our take (short version)

Verdict: It’s a close match, but Interactive Brokers is our top choice if you’re an active trader.

Interactive Brokers (IBKR) checks all the boxes for active traders: global market access, advanced tools, and competitive pricing. Its flagship platform, Trader Workstation (TWS), offers all the features you’d expect from a broker built for serious trading. For those who prefer a simpler setup, IBKR connects seamlessly with TradingView and ProRealTime, giving you flexibility without sacrificing functionality. Add in some of the lowest margin rates in the industry, and it’s hard to argue against IBKR for leverage-hungry traders.

While Charles Schwab brings solid options for casual investors and active traders alike, it has its limitations. Thinkorswim is a strong platform with advanced tools, but Schwab’s pricier margin rates and narrower selection of financial instruments give IBKR the edge for those who prioritize cost and variety. And while Schwab’s versatility makes it probably a better choice for long-term investors, this comparison is for traders—where IBKR takes the lead.

Quick Overview

We’ve evaluated Interactive Brokers and Charles Schwab across five key areas: investment options and markets, commissions and fees, trading platforms, tools and resources, and mobile app experience. Here’s how they compare.

charles schwab
Charles Schwab
Investment Options & Markets
88%
Commissions and fees
90%
Trading Platform
90%
Tools & Resources
99%
Mobile App Experience
92%
Best for
New and experienced traders and investors
Account minimum
$0
Commissions & Fees
Great for general investors
Trustpilot rating
1.5
Live coaching and exceptional educational resources
Robo portfolios and affordable advisor access with integrated banking and borrowing
IBKR
Interactive Brokers
Investment Options & Markets
99%
Commissions and fees
95%
Trading Platform
90%
Tools & Resources
95%
Mobile App Experience
90%
Best for
Sophisticated traders and active day traders
Account minimum
$0
Commissions & Fees
Best for fee-sensitive and volume traders
Trustpilot rating
3.1
Wide access to most investment options and markets
Pro Plan pricing has some of the lowest commissions available for volume traders

Charles Schwab vs. Interactive Brokers: A Detailed Comparison

Choosing the right broker comes down to your trading style and priorities. Both Charles Schwab and Interactive Brokers excel in different areas, offering unique advantages depending on what you’re looking for.

We’ve broken down their strengths, weaknesses, and key features to make your decision easier.

1. Investment Options & Markets comparison

What we look at: We evaluate brokers based on the availability of different investments and markets to help you determine whether they meet your trading and investment strategies. 

Trading InstrumentCharles SchwabInteractive BrokersKey Takeaway
StocksIBKR provides extensive access to global markets, while Schwab’s international trading is available in select foreign markets and exchanges.
Fractional SharesBoth offer fractional shares starting at $25 for IBKR and $5 for Schwab. Schwab currently only offers fractional shares for S&P 500 stocks.
ETFsSchwab offers over 3,000 $0-commission US ETFs; IBKR offers access to 15,000 global ETFs in 90 markets ; about 150 are commission-free through specific conditions.
OptionsBoth brokers offer options trading; IBKR offers access to options in 30 global market centers at USD 0.15 to USD 0.65 per US options contract. Specific conditions on $0 base + $0.65 per online options contract apply with Charles Schwab
FuturesBoth brokers offer futures trading; IBKR offers access to options in 30 global market centers.
ForexSchwab allows commission-free trading on around 65 currency pairs; IBKR offers 100+ currency pairs on 26 currencies with low commissions, no hidden spreads or markups.
CryptocurrenciesSchwab offers crypto trading only through funds, futures, and coin trusts; IBKR offers direct trading in four cryptocurrencies plus funds, futures, and trusts. 
CommoditiesSchwab offers commodities futures and ETFs; IBKR enables commodities CFDs, ETFs, futures, and options with over 100 order types, including algo.
CFDsCFDs are banned in the US and not available on Schwab; IBKR allows CFD trading in certain jurisdictions.
Margin TradingBoth brokers offer margin trading on margin-enabled accounts; IBKR has significantly lower margin rates (6.08% vs 13% for Schwab on balances up to $25k as of September 2024).
Short SellingBoth brokers allow short-selling; you must have a margin-enabled account to short sell. 
Automated TradingSchwab allows you to build your own trading bot with the Schwab API on thinkorswim; IBKR offers the IBRK RESTful API for algorithmic trading on Trader Workstation. 
International MarketsSchwab offers access to 30 international markets directly and 12 through the Global Investing Desk; IBKR offers direct access to 150 markets in 34 countries and 28 currencies. 

In summary:

  • Stick with Schwab if your focus is on U.S. markets. With its low-cost ETFs, beginner-friendly tools, and the flexibility of Stock Slices, Schwab is an excellent choice for long-term investors and those just starting out.
  • Go with IBKR if you’re an active trader or want global market access. Its unmatched international reach, direct crypto trading, and lower margin rates make it the better pick for sophisticated strategies.

    Fractional share investors will find more flexibility with IBKR, offering U.S. and European stocks, compared to Schwab’s focus on S&P 500 companies.

When deciding, ask yourself: do you value simplicity and ease of use, or do you need advanced tools and global flexibility?

IBKR wins this round

Interactive Brokers wins with access to 150+ markets, lower margin rates, and direct crypto trading.

IBKR 1, Charles Schwab 0


2. Commissions & Fees

What we look at: We assess the broker’s pricing structure, including commissions, fees, margin rates, and any hidden costs. The goal is to determine which broker offers the most cost-effective trading experience for your trading style.

What’s Being ComparedCharles SchwabInteractive Brokers
Stock & ETF $0 for U.S.-listed stocks and ETFs. OTC equities, international trades, and Canadian market trades incur fees.$0 for U.S.-listed stocks and ETFs (Lite Plan). Tiered pricing available for Pro accounts.
Options$0 base + $0.65 per contract. Additional $25 for broker-assisted and $5 for automated phone trades.$0.15–$0.65 per contract, with discounts for high-volume traders (Pro Plan).
FuturesLow fixed rates that appeal to casual futures traders.$0.25–$0.85 per contract, with volume-based pricing for cost efficiency.
Mutual FundsUp to $74.95 outside the OneSource platform, which includes many no-transaction-fee funds.$0 for NTF funds; up to $14.95 for other mutual funds.
Margin RatesStarts at 11.25%, with additional premiums based on balance. Higher than most competitors.Starts at 6.08%, dropping to 5.42% for large balances, making it among the lowest in the industry.
Fees$50 transfer-out, $25 broker-assisted trades, $6.95 OTC. No inactivity fees.No transfer fees or inactivity fees, making it a cost-effective choice for frequent traders.
Withdrawal feesNo fees for ACH withdrawals; $25 for wire transfers.$0 for ACH withdrawals; $10 for the first wire per month, $10–$12 for subsequent wires.
Pricing ModelSimple, no-commission model for U.S. stocks and ETFs. No special pricing tiers.Lite plan offers simplicity with $0 commissions. Pro plan provides tiered, volume-based discounts for active traders.
View Pricing Details Charles Schwab PricingInteractive Brokers Pricing

Important: This table highlights key pricing details from Charles Schwab and Interactive Brokers to give a good starting point for comparison. Sourced from their 2024 websites, terms may change and often include fine print. Always double-check the brokers’ official pages for the latest details.

In summary:

  • Choose IBKR if you’re an active trader looking to cut costs. Its tiered pricing rewards traders who make frequent transactions, with some of the lowest rates for options and futures. With margin rates starting at 6.08% and no fees for inactivity or transfers, IBKR is ideal for cost-conscious, frequent traders.
  • Choose Charles Schwab if you prefer simplicity and focus on U.S.-listed stocks and ETFs. Schwab’s $0 commissions for these assets are great for casual investors. But with mutual fund fees up to $74.95 and margin rates starting at 11.25%, it’s less appealing for those using leverage or trading often.

IBKR wins this round

Interactive Brokers outperforms Schwab on commissions and fees. Its tiered pricing offers lower costs for options (starting at $0.15 per contract) and futures (from $0.25 per contract), making it ideal for active traders. Margin rates start at just 6.08%, significantly undercutting Schwab’s 11.25%. While both brokers offer $0 commissions for U.S.-listed stocks and ETFs, IBKR’s pricing is better suited for traders looking to reduce costs.

IBKR 2, Charles Schwab 0

3. Trading Experience

What we look at: We evaluate the broker’s trading platform(s) for usability, features, customization, and performance. This includes charting tools, order execution, and platform stability.

Your trading platform is your command center, so choosing the right one can make or break your experience. Both Charles Schwab and Interactive Brokers offer powerful tools, but they target different types of traders. Here’s how they compare:

Charles SchwabInteractive Brokers
Best ForCasual to intermediate traders seeking a balance of simplicity and features.Designed for professional trading; it has a steeper learning curve for beginners, but it’s worth it once mastered
BacktestingthinkOnDemand allows backtesting with historical data.Supports backtesting through integration Backtrader, or third-party charting software
IntegrationsLimited to proprietary platforms, including Schwab.com for general investors and thinkorswim for advanced traders. Seamless integration with third-party tools like ProRealTime and TradingView, plus in-house platforms like Trader Workstation (TWS) and GlobalTrader for tailored workflows.
Order typesSupports a variety of order types, including advanced options strategies, catering to diverse trading needs.Offers over 100 order types, such as conditional orders and algorithmic trading, accommodating complex trading strategies
  • Charles Schwab:
    Schwab delivers a mix of simplicity and sophistication. Beginners will feel right at home with the intuitive Schwab.com platform, while advanced traders can dive into thinkorswim—praised for its balance of usability and advanced features.

    With hundreds of technical indicators, a backtesting tool (thinkOnDemand), and a 30-day guest pass for paper trading, thinkorswim stands out as an accessible yet powerful platform. Educational resources integrated directly into the platform make it especially appealing to those still building their skills. Schwab also boasts fast execution times (0.05 seconds) and strong user ratings, making it a great choice for a wide range of traders.
  • Interactive Brokers:
    IBKR’s Trader Workstation (TWS) is a powerhouse for seasoned traders who want maximum control. Users on Reddit rave about its advanced tools, like Risk Navigator and Model Navigator, which cater to complex trading strategies.

    With over 90 order types and algos, TWS is designed for those who thrive on customization. However, its steep learning curve and utilitarian design can be challenging for beginners. On the plus side, its global market access and SmartRouting system ensure trades execute at the best available price, making it an ideal choice for those who need advanced features and global reach.

Schwab wins this round

Winner: Schwab is a slight winner here due to its more intuitive user interface and the addition of thinkorswim trading tech. The Schwab trading platforms are suitable for a larger audience of traders and investors. IBKR is still a solid choice, but many of its features, capabilities and overall UX design are aimed at more active, sophisticated traders.

IBKR 2, Charles Schwab 1

4. Tools & Resources

What we look at: We assess the educational resources, research tools, market analysis, and customer support to see which broker helps you make the most informed decisions.

FeatureCharles SchwabInteractive Brokers
Educational ContentExtensive resources, live coaching, and TD Ameritrade integration.Blogs, podcasts, webinars, and free courses via Traders’ Academy.
Research ToolsStock screeners, watchlists (50 lists, 300 symbols), technical tools, and third-party insights.Wide third-party research access, subscription bundles, and TWS integration.
Customer Support24/7 phone support and expert traders via Trade Desk.24/7 phone/chat support, knowledge center, and community forums.
Integration with PlatformsSupports third-party tools via Schwab OpenView Gateway®.Integrates with TradingView, ProRealTime, NinjaTrader and more.
IBKR wins this round

Interactive Brokers edges ahead with advanced integrations like TradingView and ProRealTime, plus extensive third-party research. Its versatility and global reach make it ideal for traders at all levels. While Schwab excels in education and coaching, IBKR’s flexibility gives it the lead.

IBKR 3, Charles Schwab 1

5. Mobile App Experience

What we look at

We evaluate the broker’s mobile app for functionality, ease of use, and integration with the desktop platform so you can manage your portfolio on the go.

CategoryCharles SchwabInteractive Brokers (IBKR)
Design & UsabilitySchwab.com and thinkorswim apps replicate desktop functionality with intuitive syncing across platforms.Offers three apps: GlobalTrader (beginner-friendly), IBKR Mobile (powerful but less intuitive), and IMPACT (ESG-focused).
FeaturesComprehensive watchlists, alerts, charting, and research tools. Paper trading available on thinkorswim. Includes Level II quotes, direct routing, and live CNBC streaming.Supports all TWS asset classes. Options tools include Options Wizard and spread grid. GlobalTrader has fewer tools for stocks, ETFs, and funds.
Notable ToolsCustomizable thinkorswim app with live CNBC and Schwab Network streaming.Institutional-quality research and advanced options tools like the Options Wizard in IBKR Mobile.

Schwab wins this round

Charles Schwab comes out slightly ahead in their mobile app offering mostly due to the seamless desktop-to-mobile experience. While IBKR has powerful, full-featured apps, they don’t have the same integrated experience as the Schwab offerings. There’s also a steeper drop-off in functionality between TWS and the IBKR Mobile app.

IBKR 3, Charles Schwab 2

Other considerations

Choosing between Charles Schwab and Interactive Brokers comes down to how their specific features align with your needs.

Charles Schwab suits traders looking for convenience. Its banking integration combines investments and everyday finances, and its branch network provides in-person support. With thinkorswim’s tools, Schwab offers detailed charting and analysis for U.S.-focused traders.

Interactive Brokers (IBKR) is designed for active traders in global markets. Its multi-currency accounts simplify international trading, while Lite and Pro plans cater to different levels of experience. The option to lend out fully paid shares adds a unique income opportunity for long-term investors.

Schwab is ideal for simplicity and U.S.-based support, while IBKR offers flexibility and global reach.

Overall Winner: Interactive Brokers

Interactive Brokers sets itself apart with its advanced features, competitive pricing, and extensive global market access, making it a top choice for active day traders who need versatility and access to sophisticated tools.

Charles Schwab’s thinkorswim platform, while a strong competitor, prioritizes ease of use and provides excellent educational resources, making it an attractive alternative for traders who value learning support and a user-friendly experience.

Ready to start trading? Explore Charles Schwab or Interactive Brokers for yourself and see which one suits you best.

FAQs

Is Charles Schwab reliable?

Yes, Charles Schwab is reliable. Charles Schwab has been around since 1971. As of August 2024, it was the largest US broker in terms of assets under management, with over 36 million active brokerage accounts and $9.4 trillion in AUM. Schwab acquired TD Ameritrade in 2020, significantly boosting its trading tech and educational offerings. Of note, Schwab did experience a data breach in 2023 impacting some 61,000 customer accounts. The file transfer system at the source of the breach is no longer in use. 

Does Interactive Brokers offer crypto trading?

Yes, you can directly trade crypto with IBKR. You can also trade crypto coin trusts, funds, and futures. 

Which broker is better for beginners?

Charles Schwab is the better broker for beginners. The educational content is extensive, easy to use, and available in multiple formats. They also offer direct access to trading experts and live coaching, robo portfolios, and affordable advisory services. 

What are the minimum deposit requirements?

Both Charles Schwab and Interactive Brokers have $0 account minimums. 

How do the brokers make money with zero commissions?

Zero-commission brokers make money in two main ways:
Payment for order flow (PFOF)
Margin interest rates

Payment for order flow is the money brokers receive for routing orders to certain market makers for execution. Here’s how it works: When you place an order, the broker routes it to a third-party market maker instead of the exchange for execution. The market maker pays the broker a tiny fee, either a fixed rate or percentage of the spread, in exchange. 
This system can actually benefit retail traders and investors because the spread is often tighter than with traditional exchanges and they get commission-free trades. 
However, options traders don’t always get the same financial benefit because the bid-ask spreads are wider. The knock-off effect on supply and demand can also impact retail equities traders. 
PFOF is a controversial practice and the Securities and Exchange Commission has studied it for years. However, the consensus is that the benefits outweigh any potential disadvantages because PFOF has tremendously expanded access to everyday traders and investors. Active and professional traders, on the other hand, might be better served using brokers with a commission structure that avoids PFOF. 

author
Sheila Olson

Sheila has been a key figure in health IT, collaborating with innovators in healthcare since the 1990s. Her expertise extends to writing on healthcare trends, public policy, and biotech innovations for industry publications. Her deep understanding of healthcare significantly informs her investment strategies, particularly in biotechnology and pharmaceutical sectors.

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