Fidelity vs Schwab: Which Giant Wins in 2025?

The Big Difference: PFOF vs No PFOF

The most significant philosophical difference: Fidelity doesn't accept payment for order flow on stocks and ETFs. Schwab does.

What does this mean practically? When you place a trade at Schwab, your order may be routed to market makers like Citadel who pay for the privilege of executing it. Fidelity routes directly to exchanges and other venues, seeking best execution without that conflict of interest.

For a casual investor making occasional trades, the price difference is pennies. For active traders executing thousands of shares, Fidelity's approach could save meaningful money over time.

Platform Power: thinkorswim vs Active Trader Pro

Schwab's acquisition of TD Ameritrade brought them thinkorswim, arguably the most powerful retail trading platform available. It offers professional-grade charting, options analysis tools, and customization that Active Trader Pro can't match.

If you're an active trader who wants institutional-quality tools, thinkorswim tips the scales toward Schwab. If you're a buy-and-hold investor who rarely needs advanced charting, Fidelity's simpler interface may actually be preferable.

Customer Service: Fidelity's Edge

Fidelity offers genuine 24/7 customer support via phone. Schwab's hours are more limited. When you have an urgent issue at 2am, this matters.

Both offer in-person help, but Schwab has twice as many branches (400+ vs ~200). If face-to-face interaction is important, Schwab has broader reach.

The Cash Problem: Schwab's Weak Spot

Schwab's cash sweep rate is notoriously low—around 0.5% while competitors offer 3%+. If you keep $50,000 in cash, that's ~$1,250/year in foregone interest. Schwab makes billions on this spread.

Fidelity automatically sweeps to FCASH (Fidelity Government Money Market) at ~2.7%. Still not amazing, but much better than Schwab's default.

Fractional Shares: Fidelity Dominates

Fidelity offers fractional shares on 7,000+ stocks with a $1 minimum. Schwab limits fractional investing to S&P 500 stocks only (Schwab Stock Slices). If you want to invest $10 in Tesla or Nvidia, Fidelity is your choice.

Banking Integration

Schwab offers a checking account with no ATM fees worldwide and no foreign transaction fees—one of the best for travelers. Fidelity's Cash Management Account offers similar perks.

Both integrate seamlessly with their brokerage accounts. Schwab's longer history in banking gives them a slight edge in branch ATM access.

Our Verdict

These are both excellent brokers—you can't really go wrong. But if we had to choose: