Charles Schwab offers one of the most complete IRA lineups of any major brokerage — Roth, Traditional, Rollover, SEP, SIMPLE, Custodial, and Inherited IRAs, all with $0 account minimums and $0 commissions on stocks and ETFs. The 2026 IRA contribution limit is $7,000 ($8,000 if you are 50 or older).
Key advantage: Schwab allows fractional share purchases of S&P 500 stocks and ETFs starting at $5, making it easy to invest every dollar of your IRA contribution without leaving cash idle.
Schwab IRA at a Glance
| Feature | Details |
|---|---|
| IRA types | Roth, Traditional, Rollover, SEP, SIMPLE, Custodial, Inherited |
| Account minimum | $0 |
| Stock/ETF commissions | $0 |
| Options | $0.65 per contract |
| Fractional shares | Yes (S&P 500 stocks and ETFs via Stock Slices) |
| 2026 contribution limit | $7,000 / $8,000 (50+) |
| Robo-advisor | Schwab Intelligent Portfolios (free, $5,000 min) |
| SIPC protection | $500,000 per account type |
Roth IRA vs. Traditional IRA at Schwab
| Factor | Roth IRA | Traditional IRA |
|---|---|---|
| Tax treatment | After-tax contributions; tax-free growth and withdrawal | Pre-tax (may be deductible); taxed on withdrawal |
| 2026 income limit | $150,000 single / $236,000 married (phase-out begins) | No limit for contributions; deduction phases out at $79,000 single with workplace plan |
| RMDs | None during owner’s lifetime | Start at age 73 |
| Early withdrawal | Contributions withdrawable penalty-free anytime | 10% penalty before 59½ (with exceptions) |
Worked Example: $7,000/Year Roth IRA at Schwab
Investing $7,000 per year at age 35, in a low-cost S&P 500 index fund (historical 7% real return):
| Age | Years | Total Contributed | Estimated Tax-Free Balance |
|---|---|---|---|
| 45 | 10 | $70,000 | ~$97,000 |
| 55 | 20 | $140,000 | ~$273,000 |
| 65 | 30 | $210,000 | ~$567,000 |
All $567,000 is available tax-free in retirement from a Roth IRA — no required minimum distributions, no income tax on withdrawals.
Investment Options Inside a Schwab IRA
- Stocks and ETFs: $0 commissions; fractional S&P 500 shares via Stock Slices
- Schwab ETFs: Expense ratios as low as 0.02% (SCHB, SCHX, SCHF, SCHZ)
- Mutual funds: Large NTF (no-transaction-fee) list; $49.95 for outside funds
- Bonds: Treasuries, CDs, corporate bonds, bond ETFs
- Options: Available in IRAs with approval
- Schwab Intelligent Portfolios: Free robo-advisor with $5,000 minimum — can be held inside an IRA
What is NOT available: Cryptocurrency, futures, forex inside an IRA
Schwab’s Best Low-Cost Funds for an IRA
| Fund | Type | Expense Ratio | What It Tracks |
|---|---|---|---|
| SCHB | ETF | 0.03% | US Total Market |
| SCHX | ETF | 0.03% | US Large Cap |
| SCHF | ETF | 0.06% | International Developed |
| SCHZ | ETF | 0.03% | US Total Bond Market |
| SWTSX | Mutual Fund | 0.03% | US Total Market |
| SWAGX | Mutual Fund | 0.04% | US Aggregate Bond |
A simple two-fund IRA portfolio at Schwab — 80% SCHB + 20% SCHZ — costs just 0.03% annually, essentially zero.
Schwab IRA vs. Fidelity and Vanguard
| Feature | Schwab | Fidelity | Vanguard |
|---|---|---|---|
| Account minimum | $0 | $0 | $0 |
| Fractional shares | Yes (S&P 500) | Yes (all stocks/ETFs) | ETFs only |
| Zero expense ratio funds | No (0.03% min) | Yes (FZROX: 0.00%) | No (0.03% min) |
| Robo-advisor in IRA | Yes (free, $5K min) | Yes (free <$25K) | Yes (~0.15%) |
| Custodial IRA for minors | Yes | Yes | Yes |
| SEP and SIMPLE IRA | Yes | Yes | Yes |
| Solo 401(k) | Yes | Yes | No |
Schwab’s main advantage over Fidelity in an IRA is the free Intelligent Portfolios robo-advisor and the broader fractional share offering via Stock Slices. Fidelity edges ahead with its true zero-expense-ratio FZROX and FZILX funds. Vanguard trails both on platform usability but offers the widest fund family for buy-and-hold index investors.
For the complete Schwab brokerage overview, see the Schwab review or compare all platforms in our best brokerage accounts guide.
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