Charles Schwab

Is Charles Schwab safe?

As a place to hold investments, yes. Your shares and funds sit with Charles Schwab & Co., Inc., a broker-dealer with $16.1 billion of net capital at 30 June 2026, $12.6 billion more than the rules require. Client assets are segregated from Schwab's own, covered by SIPC and backed by an excess SIPC programme. We score Schwab 87/100 as a broker.

The record is the weaker part. Schwab paid $187 million in 2022 to settle SEC charges that its robo-adviser misled clients about the cost of its cash holdings, and the SEC has fined the broker since then for record-keeping. Neither cost clients their assets, but they count.

This page scores the brokerage. Schwab's banks, deposits and the 2023 run on sweep cash are covered on our Charles Schwab bank page, where it scores 79/100 against bank criteria.

How are investments at Schwab protected?

Three layers stand between you and a loss if Schwab's broker failed.

1. Segregation. SEC rules require Charles Schwab & Co. to keep client securities apart and to hold cash in reserve against what it owes clients. In a normal broker failure, clients get their own assets back.
2. SIPC. If anything is missing, SIPC covers up to $500,000 per customer per account capacity, of which up to $250,000 can be cash.
3. Excess SIPC. Schwab's own programme pays beyond SIPC, with a $600 million aggregate limit across all clients.

How you hold cash changes the picture. Bank Sweep cash is a deposit at Schwab's banks or at TD Bank, insured by the FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary up to $250,000 per depositor per bank, not by SIPC. Schwab must keep between $60 billion and $90 billion of client sweep cash at TD Bank until 2034, and the balance was $70.7 billion at mid-2026. Money market funds are securities, so they fall under SIPC if the broker fails, but they can lose value. Futures and cash in futures accounts are not SIPC-protected.

How strong is Schwab financially?

Strong. The Charles Schwab Corporation earned $8.85 billion in 2025 and $5.3 billion in the first half of 2026, and had $50.1 billion of equity at 30 June 2026. Its senior debt is rated A2 by Moody's, A- by S&P and A by Fitch, and the broker's commercial paper is rated P1 and A1.

The 2023 episode is the reason we stop short of the top band. When rates rose, clients pulled cash from low-paying sweep accounts while Schwab's banks held long-dated bonds worth far less than their book value. Schwab covered the outflows with borrowing rather than forced sales, and it has repaid nearly all of it. The broker's segregated client assets were not part of that problem, but a parent under stress is a parent under stress.

Did the TD Ameritrade merger change anything?

Schwab completed its purchase of TD Ameritrade in October 2020 and moved about 17 million client accounts, holding $1.9 trillion, onto its platform in five waves during 2023 and 2024. The final group moved in May 2024. Former TD Ameritrade clients are now customers of Charles Schwab & Co. A class action claiming the deal harmed competition in order execution was settled without a material payment; the court approved it in November 2025, and objectors have appealed.

What has Schwab been fined for?

BrokerCheck lists 59 regulatory events for Charles Schwab & Co. The ones that matter:

• 2022, robo-adviser: $187 million in total, including a $135 million penalty, after the SEC found that Schwab Intelligent Portfolios set its cash allocations to suit Schwab's earnings, not clients. Schwab neither admitted nor denied the findings.
• 2025, record-keeping: a $10 million SEC penalty for off-channel messages and about 330,000 business texts that were never preserved.
• 2018, suspicious activity reports: $2.8 million to the SEC for failing to file suspicious activity reports as required (Exchange Act rule 17a-8).
• 2020, UK client assets: the FCA fined Charles Schwab UK £8.96 million over how it handled client money and assets.

How to keep your Schwab account safe

• Turn on two-step verificationTwo-factor authenticationSigning in with a second proof of identity on top of your password, such as a code from an app, a security key or a passkey.More in the glossary. It is opt-in, and the Security Guarantee excludes losses where you shared credentials or let someone remote into your device.
• Do not connect apps Schwab has not partnered with; losses through them are outside the guarantee.
• Check where your cash sweeps. If it is at TD Bank and you also bank with TD, both count toward one $250,000 FDICDeposit insuranceA government-backed scheme that repays bank customers up to a set limit if their bank fails, such as the FDIC in the US or the FSCS in the UK.More in the glossary limit.
• Spot crypto through Charles Schwab Premier Bank is not covered by SIPC or the FDIC.

How we scored it

Regulation (94) and financial strength (92) are the top factors: a broker with large excess capital inside a Fed-supervised, profitable group. Investor protection (90) reflects segregation, SIPC and an excess policy with a larger aggregate cap than Interactive Brokers. Conduct (68) is the weakest, because the robo-adviser case involved client harm.