True banking options are limited to just checking and savings accounts with Charles Schwab. No certificates of deposit (CDs) or money market accounts are available outside of its brokerage offerings. For an all-in-one banking solution, customers must look elsewhere.
The only other services offered under Charles Schwab’s banking umbrella are home loans, an all-purpose line of credit secured by assets.
Home Loans
Charles Schwab online offers mortgages provided by Rocket Mortgage. If you hold at least $250,000 in assets with Charles Schwab brokerage, you may qualify for mortgage interest rate discounts.
However, it’s unlikely that Schwab banking will be the best option for first-time homebuyers. While the bank offers fixed-rate loans, the website exclusively highlights loan terms for five- to seven-year adjustable rate mortgages (ARMs).
You also can refinance through Charles Schwab. The bank offers both traditional refinance and cash-out refinance options. Additionally, you can access a home equity line of credit (HELOC) to cover the cost of home improvements, major purchases or education.
HELOCs can also be used for debt consolidation and tax expenses. But be cautious using a HELOC for these purposes, because the loan will use your home as collateral. Credit cards, student loans and personal loans are all unsecured loan options that can help you cover these costs.
Asset-Based Borrowing
Charles Schwab offers two loan options secured by your assets under management (AUM) in a Schwab brokerage account. You can obtain a margin loan to capitalize on market opportunities when you don’t have the cash on hand. Margin loans can also be used as short-term loans.
But there’s some risk. Market performance is not guaranteed, and by using a secured loan to cover short-term personal expenses, you’re placing your portfolio assets at risk.
Schwab Bank also offers pledged asset lines of credit—credit lines that allow you to borrow against the assets in your Schwab investment portfolio for larger, planned expenses. The minimum line is $100,000.
This option may be appealing in a low-performing market as the rates can be better than many cash-out refinance options. Since this is a secured line of credit, it’s unlikely to be your best option for education or other major purchases, for which an unsecured option is available.
Credit Cards
If you hold an eligible Charles Schwab account, there are two American Express cards available to you.
The Schwab Investor Card® from American Express* offers a $200 statement credit after spending $1,000 in purchases in the first three months of card membership. It comes with no annual fee and earns you 1.5% cash back automatically deposited into an eligible Schwab account for purchases made with the card.
The The Platinum Card® from American Express for Charles Schwab* comes with a $695 annual fee. The card offers a welcome bonus of 100,000 points after spending $6,000 in the first six months of card membership. This card earns 5 points per dollar on flights booked directly with airlines or with American Express Travel, up to $500,000 per calendar year, 5 points per dollar on prepaid hotels booked with American Express Travel, including The Hotel Collection and 1 point per dollar for everything else.
Points may be used for deposit into an eligible Schwab account. You can also earn a statement credit if your Schwab holdings meet the required threshold. However, with the high annual fee, after the initial bonus, this card may not offer what you need.
