Money at 30: Charles Schwab Investing Starter Kit Overview

These days, there is no shortage of easy-to-use brokerage accounts that consumers can turn to when they’re ready to begin investing. From SoFi to Public and, of course, Robinhood, these fee-free accounts have revolutionized the industry in ways both good and bad, leaving traditional brokerage accounts to evolve as well. One such firm that’s seen a number of changes in recent years is Charles Schwab, which has attempted to bring younger and newer investors into its platform by rolling out such features as Stock Slices and commission-free trades. Recently, Schwab continued that trend by introducing its Investor Starter Kit, offering free stocks and other perks to new account holders.

So what exactly is the Schwab Starter Kit? Let’s take a closer look at the offering as well as my experience with it so far:

About the Charles Schwab Investing Starter Kit

What is the Schwab Starter Kit

To help new investors jump-start their portfolios, Charles Schwab is currently offering what they call their Schwab Starter Kit. With this special package, new customers can open a free Schwab brokerage account and receive free Stock Slices, educational materials on stock trading, and more.

How does it work?

By visiting the Schwab Starter Kit site or using the code “SCHWABSTARTERKIT” when opening an account, you’ll be eligible for the benefits of this offer. Currently, those who open a new Charles Schwab brokerage account and fund it with at least $50 will earn $101 worth of “Stock Slices” for free (get it? 101?). Specifically, this $101 will be split across five company stocks — which happen to represent the top five stocks in the S&P 500. These include:

  • Amazon ($AMZN)
  • Microsoft ($MSFT)
  • Tesla ($TSLA)
  • Alphabet ($GOOGL)
  • Apple ($AAPL)

Note that the top five S&P stocks may change from time to time, which will mean that Schwab’s offer will change accordingly. As their site notes, “The stocks you purchase will be the top five stocks in the S&P 500 by market capitalization on the date your orders are placed.”

According to Schwab, two business days after your account has been opened, it will begin monitoring for deposits. Once the funding minimum has been reached, a $101 credit will display as cash the next evening (depending on the time your funding deposit is received). Then, customers will receive notification of their upcoming stock orders, with the five Stock Slice orders processing on the next trading day. Interestingly, Schwab notes that users can cancel these orders before they are executed, in which case they’d be able to keep the $101 bonus in cash or invest it as they see fit.

Of course, there may be other restrictions that apply, so be sure to check out the fine print on the Starter Kit site for more details.

Educational materials

These resources not only include video guides and written materials on some of the basics of investing — such as jargon, mechanics, and even a little bit of technical analysis — but also walks you through how to use some of the Schwab platform features.

If you really are brand new to investing, watching these videos and exploring these materials will be well worth your time. For those who are a bit more seasoned, you may want to pick and choose which elements you want to dive in on. Either way, it’s nice to have these extra resources at your disposal.

Schwab fees

As I mentioned at the top, Charles Schwab has mostly done away with its commission and trade fees. For listed stocks and ETFs, online trades come with a $0 commission. However, while Options have $0 online base commission, there’s a $0.65 per contract fee. Elsewhere, Schwab has no account minimums or maintenance fees for brokerage accounts, IRAs, Investor Checking Accounts, or Schwab Trading Services accounts.

Other Schwab opportunities

I’d be remiss if I didn’t mention another aspect of being a Schwab customer that I think is interesting. As I’ve previously shared, I’m a big fan of the American Express Platinum card. However, my biggest gripe with the offering (aside from its $695 annual fee) is the fact that points are only worth 0.6¢ each if redeemed for statement credits. Luckily, the new American Express Rewards Checking account provides customers with a 0.8¢ cashout option, but it’s still not quite up to par in my opinion. That’s where the American Express Platinum Card for Schwab card comes in.

While this “flavor” of the Platinum card has all of the same benefits as the original, cardholders with the Schwab Platinum can redeem their Membership Rewards points for deposits into their Schwab account at a rate of 1.1¢ per point. Sadly, this is down from the previous 1.25¢ each — but it’s still an improvement over the other options. So, if you do take advantage of the Schwab Starter Kit offer and are interested in the Amex Platinum overall, this variant may be the one to consider.

My Experience with the Schwab Starter Kit

Opening my account

Getting started with my Schwab brokerage account was pretty easy, albeit a bit lengthy. To open an account, you will need to provide some personal info including your name, birthdate, address, Social Security number, etc. All of this is standard, so what made the process so long? Well, as you open your account, you’ll have to option to open a number of other accounts alongside your brokerage. However, this requires you to review and acknowledge separate terms and conditions for each.

Okay, so when I say the process was “lengthy,” it still only took me a matter of minutes. Plus, it’s partially my fault for opting into so many additional accounts. Still, considering that the reward is worth $100+, I think it was still time well spent.

Funding my account

Transferring money to my Schwab account was also quite easy. After linking my Wells Fargo account, I set up a transfer for $100, which cleared within a couple of days. Once it did arrive, I actually purchased a Stock Slice on my own even before my bonus Slices arrived.

My Stock Slice orders

Just as the process was outlined in the section above, once my deposit was recognized by Schwab, I saw the $101 credited to my account. Then, the next trading day, I got word that my Slices would soon be purchased. Sometime later, I received notifications one after another informing me that my trades had indeed been placed, with each Slice then showing in my portfolio. Although I haven’t tried selling any of the shares I now have, there doesn’t seem to be anything preventing me from doing so. Thus, if investors did miss the option to cancel their default Stock Slices order and want to offload their selections, they totally could.

The Schwab platform

Finally, having come from the world of FinTech, I do feel as though the Schwab platform does lack a certain sleekness that many modern apps have. While the service has plenty of features (likely more than most basic apps) and works perfectly well, I can’t help but wish it was a little bit nicer to look at. Other than that, I’ve been pleased with my limited time using Schwab so far.

Final Thoughts on the Schwab Starter Kit

Whether you’re completely new to trading, just new to Schwab, or want to try out another brokerage service, the Schwab Starter Kit could present a great opportunity. Considering that you only need to fund your account with $50 in order to get $101 in free stocks make this nearly a no-brainer. Plus, the educational elements of the Starter Kit also present value to newbie investors. For those reasons, I’d recommend checking out the Schwab Starter Kit for yourself.


Also published on Medium.

Author

Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site LaughingPlace.com and has recently starting publsihing his own personal finance blog at https://moneyat30.com/

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