Charles Schwab Bank is the online banking subsidiary of the Charles Schwab Corporation (which is more commonly referred to as just Schwab).
The banking platform offers checking and savings accounts and is built to operate seamlessly with your investing experience.
In this post, you’ll learn everything you need to know about banking with this massive financial institution, including an overview of the fees, the pros and cons of being a customer, how to sign up, and more.
Let’s start with a look at the most interesting banking features that Charles Schwab offers.
Charles Schwab Bank Products
Charles Schwab Bank offers two accounts through its online platform, a checking account, and a savings account.
Both accounts are mostly fee-free, allow for direct deposits and the use of an ATM card.
Schwab does offer other banking products like American Express credit cards and certificates of deposit, but since these products are only offered in conjunction with its investment platform.
For this post, we’ll stick to what Schwab offers specifically through its online bank.
Schwab Bank High-Yield Investor Checking Account
The Schwab Bank High-Yield Investor Checking Account is an interest-earning online checking account.
The account has no account minimums or monthly maintenance fees and offers unlimited ATM fee reimbursement and fee-free foreign transactions.
You’ll get a Schwab Bank Visa Platinum Debit Card when you open your account, which is compatible with contactless payments and your digital wallet, plus free standard checks and bill pay.
As we mentioned, the account also comes with a linked Schwab brokerage account, so you can view both accounts and easily transfer funds between them.
Unfortunately, this account is high-yield in name only. The current APY of 0.03% is above average for traditional banking but doesn’t come close to the rates associated with other online banks. Another drawback is that there’s no way to deposit cash.
Top Features That Stand Out:
- No account minimums
- No fees
- Unlimited ATM fee reimbursement
High-Yield Investor Savings Account
High Yield Investor Savings is a basic online savings account with no monthly service fees or minimum balance requirements.
You can easily link the account with both your checking and brokerage account, and it comes with the same ATM rebates and mobile app access as checking.
The account currently earns 0.05% on interest. Again, this isn’t exactly an eye-popping APY for an online bank, and while it’s still higher than what you’ll see with most traditional banks, it leaves a lot to be desired.
Top Features That Stand Out:
- Convenient option for Schwab customers
- No fees
- APY could be better
Schwab Bank also offers home loans, and you could be in line for a discounted interest rate depending on your overall relationship with the bank.
The more qualifying assets you have between Schwab accounts, the more you’ll save.
Here’s a look at the rate discounts currently available:
- Asset amounts from $250,000 to $999,000 come with a 0.25% discount
- Asset amounts from $1 million to $4.9 million come with a 0.50% discount
- Asset amounts of $5 million or more come with a 0.75% discount
Charles Schwab Bank Features
It’s important to understand that even though Charles Schwab has nearly 400 physical locations, Charles Schwab is an online bank, and its brick and mortar shops do not provide banking services.
That said, Schwab’s online banking platform gives you easy access to all of your accounts, both banking and investing, under a single login.
Manage your balances, make transfers, pay bills, and monitor your growth from the website or mobile app.
Though Charles Schwab Bank is separate from its investing platform and other financial services, the mobile banking app serves as a one-stop-shop for all of your accounts.
You can make mobile check deposits, move money between accounts, and take care of payments from your smartphone, all while keeping tabs on your linked investment account.
The Schwab app has a solid reputation overall, though it seems to perform better on Apple than Android. The app currently holds a rating of 4.8 stars (out of 5) in the App Store, but just 3.1 stars (out of 5) in the Google Play Store.
Unlimited ATM Fee Rebates
With Charles Schwab, there’s no need to worry about ATM fees. When you take cash out at any ATM worldwide, you’ll be reimbursed for any fees that pop up.
Linked Brokerage Account
An online checking account with Charles Schwab is only available with a linked Schwab One brokerage account.
Fortunately, the brokerage account doesn’t have any monthly fees, minimum balance requirements, trade requirements, or even a requirement to fund it at all.
This way, even if you aren’t ready to dive into investing just yet, you can still open up a bank account without any associated fees.
Charles Schwab Bank Fees
Some good news is that Schwab customers don’t have much to worry about when it comes to the fees that you might be used to seeing with traditional banks. In fact, both accounts are almost entirely fee-free.
Here’s a look at what’s included:
- No monthly service fees
- No minimum balance fees
- All ATM fees reimbursed
- No debit card replacement fees
- No foreign transaction fees
- No overdraft protection fees
- No electronic transfer fees
- No incoming wire transfer fees
- Free standard checks
- No stop payment fees
Non-Sufficient Funds (NSF) Fees
Schwab differentiates between overdraft and NSF fees. While there’s no charge for overdraft items or overdraft protection, returned items like a bounced check will trigger a $25 NSF fee per item, up to $100 per day. For most Schwab customers, this shouldn’t be an issue.
Outgoing Wire Transfer Fees
Incoming wires are always free, but outgoing wire transfers will cost $25 per transfer.
To sign up for a new Schwab Bank account, you can apply online in as little as 10 minutes.
You can also call and apply over the phone or download and print a paper application and mail it in.
To proceed, you’ll need a permanent US address, a Social Security or Tax ID Number, and your employer’s contact information (if applicable).
For High Yield Investor Checking, you’ll open your brokerage account at the same time and will receive a separate account number for each.
Charles Schwab Bank Promotions
Here are some of the best Charles Schwab promotions going on right now:
1. Schwab One® - up to $1000 bonus
Expires: Limited Time
If you're not currently a Schwab customer, you can open any investment account and earn a referral bonus based on your net deposit within 45 days. This includes retail brokerage accounts, individual retirement accounts, or the managed portfolios like Schwab Intelligent Portfolios®.
Keep in mind that the link above is only for details – you will need to open the account through a referral link from an existing Schwab customer in order to qualify for the promo.
This is a tiered bonus, the more you deposit, the more you can earn.
- Tier 1 | Balance Maintained: $25,000 - $49,999: $100 Bonus
- Tier 2 | Balance Maintained: $50,000 - $99,999: $300 Bonus
- Tier 3 | Balance Maintained: $100,000 - $499,999: $500 Bonus
- Tier 4 | Balance Maintained: $500,000+: $1,000 Bonus
How to earn the bonus
The Schwab One® sign up offer requires you to deposit and maintain a minimum balance and use a referral link in order to earn the $1000 bonus. Full requirements to receive this bonus are:
- Open a new account using a referral link from an existing member.
- Within 45 days, make a qualifying net deposit between $25,000 - $500,000+ in cash or securities, earning the reward that correlates with that tier ($100-$1,000).
- The net deposit amount at the end of 45 day period will be used to calculate your bonus tier.
- Bonus will be paid into your account about a week after the 45-day period.
2. Schwab One® - $101 bonus
Expires: Limited Time
Charles Schwab has a bonus targeting new or entry-level investors in what they call the Schwab Starter Kit™, but new customers of all comfort levels can qualify. When you open a new account for this promo, Schwab will invest your bonus in fractional shares or "slices" of the top stocks by market cap in the S&P 500. Schwab recently upped this bonus from $50 at its previous level. It's a great way to start investing!
How to earn the bonus
The Schwab One® sign up offer requires you to deposit and maintain a minimum balance in order to earn the $101 bonus. Full requirements to receive this bonus are:
- Open a new Schwab One account at the url below or open a new taxable investment account using promo code "SCHWABSTARTERKIT".
- Within 30 days, Fund your account with a minimum of $50.
- Once funded, Schwab will deposit $101 in your account to purchase your stock slices at approximately 6:00 pm Eastern Time the next trading day.
Even if you aren't interested in investing, it might be worth it to put the bulk of your initial deposit into your brokerage account since you'll be opening one with a High Yield Investor Checking anyway. Once the bonus comes through, you can easily move money out of your brokerage account and into your checking or savings accounts as you see fit.
As an online bank with the backing of a major financial corporation, Schwab bank has the means and the motivation to ensure that all of your online banking is safe and secure.
Here’s an overview of the security measure in place to provide worry-free banking:
- Authentication: Schwab maintains strict rules for secure user IDs and passwords and requires authentication when logging in and before executing transactions.
- Web Security: Schwab uses Secure Socket Layer (SSL) technology and encrypted cookies to keep sensitive information from being compromised.
- Email Security: Phishing and other security concerns are addressed with a constant reevaluation of email security and login standard.
- Transaction Monitoring: Internal transaction monitoring systems stay ahead of any suspicious activity.
- FDIC Insurance: Schwab Bank is FDIC-insured, so all of your deposits are protected for up to $250,000.
When you need some help, Schwab has a 24/7 live chat on the website and a dedicated customer service phone line for banking customers (888-403-9000).
Phone support is available Monday through Friday from 4 am to 8 pm Pacific Time and from 6 am to 7:30 pm on weekends.
Schwab has separate phone lines for most of its product categories, but not everyone seems to be impressed with the level of service that it provides.
On TrustPilot, Schwab has an overall rating of 1.9 stars (out of 5). However, it’s important to note that these reviews apply to all of Schwab’s services and aren’t necessarily reflective of the customer service provided for banking.
Pros & Cons
- Large, multinational institution
- Easy to link with investment platform
- Very few fees
- Unlimited ATM rebates
- Low APYs
- No physical branch access
- No sign-up bonus for deposit accounts
- Cannot deposit cash
Alternatives to Charles Schwab Bank
If you’re interested in a big bank that also offers investment services, you could take a look at:
…which all offer a full suite of financial products along with online banking.
Is Charles Schwab a good bank?
Overall, yes, Charles Schwab Bank offers solid online-only checking and savings accounts. Its parent company, Schwab, has a 50-year history in the financial industry and is one of the world’s most well-known and valuable brands. Whether or not it’s a good bank for you completely depends on what you need from a bank.
Is Charles Schwab Bank Safe?
Yes, Schwab Bank is safe. It’s FDIC-insured, has the backing of a massive financial institution, and comes flush with online security features that allow you to bank safely online.
What bank is associated with Charles Schwab?
Charles Schwab Bank its own bank and is a member-FDIC and an Equal Housing Lender. It’s a subsidiary of the Charles Schwab Corporation.
Is Charles Schwab Bank Right For You?
Charles Schwab Bank provides basic deposit accounts that come with virtually no fees, respectable online banking features, and preferred rates for high net worth individuals.
Overall, Schwab Bank is recommended for those who are already comfortable with Schwab’s investment platform and want all of their deposit and investment accounts in one place.
If you’re looking to grow your balance on interest alone, there are better options out there. While Schwab has brand name recognition, it also comes with relatively low APYs. With the lack of in-person banking services, it could be tough to justify the low rates with so many other top HYSAs out there.
No matter which direction you head in, always remember that banks should work for you and not the other way around!