Charles Schwab Review

Charles Schwab offers $0 commissions on all online stock and ETF trades with no hidden fees. This puts them on par with Fidelity and other top brokers for cost-conscious dividend investors.

Options trades are also commission-free, though you'll pay $0.65 per contract. This is standard across most brokers and reasonable for occasional options traders who want to sell covered calls on dividend stocks.

One thing to note: Schwab charges $6.95 for OTC (over-the-counter) stock trades. If you're investing in well-known dividend stocks, this won't affect you, but it's worth knowing if you venture into penny stocks.

Schwab offers free dividend reinvestment with fractional share support, meaning every penny of your dividends gets reinvested rather than sitting as idle cash. This is essential for maximizing compound growth.

Important: Unlike some brokers, DRIP is NOT enabled by default at Schwab. You'll need to go into your account settings and turn it on for each position. It's a one-time setup, but don't forget to do it.

You can enable DRIP on a per-security basis, giving you flexibility to reinvest dividends from some holdings while taking cash from others. This is useful if you want to build specific positions faster.

Schwab provides solid research tools on their main platform, including a stock screener that lets you filter by dividend yield, payout ratio, and other fundamentals. There are also predefined screeners like "Dividend Growth" to help you find ideas quickly.

The real power comes from thinkorswim, the trading platform Schwab acquired from TD Ameritrade. The Stock Hacker tool offers 60+ filters including dividend yield, making it one of the most powerful screeners available.

Each stock profile shows dividend history, yield, payout dates, and ex-dividend dates. You'll also find analyst research and ratings to help evaluate dividend sustainability.

This is one area where Schwab lags behind. Fractional shares are only available for S&P 500 stocks, and you need a minimum of $5 to buy. Fidelity and other competitors offer fractional shares on a much wider selection with lower minimums.

The good news: most popular dividend stocks like Johnson & Johnson, Coca-Cola, and Procter & Gamble are in the S&P 500, so you can still buy fractional shares of classic dividend payers. But if you want fractional shares of smaller dividend stocks or REITs, you're out of luck.

This is where Schwab really shines. They offer 24/7 phone support with knowledgeable representatives who can help with everything from basic questions to complex tax situations.

Unlike online-only brokers, Schwab has 400+ physical branches across the US. If you prefer face-to-face help or have a complex situation, you can walk into a branch and talk to someone in person.

Schwab was named the #1 Overall Most Trusted Financial Company by Investor's Business Daily in 2024—a testament to their reputation for reliability and customer care.

Following the TD Ameritrade acquisition, Schwab customers now have access to thinkorswim—one of the most powerful trading platforms available. It's available as desktop software, web app, and mobile app.

For dividend investors, thinkorswim offers advanced charting, paper trading to practice strategies, and powerful screening tools. The Stock Hacker scanner lets you filter by dividend yield, growth rate, and dozens of other metrics.

While thinkorswim has a learning curve, it's worth exploring if you want to do deeper research on dividend stocks. The standard Schwab app and website work fine for basic investing.