USAA Investments Review & Rating USA 2021
Is USAA Investments Scam Or Legit?
USAA Investments is a financial offshoot of the United States Automobile Association that offers a comprehensive brokerage and investment service to both civilians and service personnel. Our USAA Investments review found that despite its military connections (one in four employees of the firm is either a veteran or military spouse), USAA Investments USA is popular with civilian investors, having provided a trusted and reliable service for over 40 years. However, as of 2020, the brokerage service offered by USAA was sold to Charles Schwab.
USAA Investments had already established a good reputation based on its wide range of investment options. What’s more, the firm’s military values made it one of the nation’s most trusted brokers.
Since the sell-off, USAA Investments USA has seen its offering enhanced with more professional trading tools and benefitted from almost 50 years of financial expertise from Charles Schwab – which has long been recognized as one of the US’s top brokerage firms, alongside other major players such as those discussed in our Vanguard review and Wealthfront review.
This USAA Investments USA review aims to provide an overview of the broker, identify its pros and cons, and help you decide whether it is suitable for your own investment goals.
After the sale of USAA – We recommend M1 Finance as our top alternative. Read more about then in our M1 Finance review, or check them out in the link below
USAA Investments Pro and Con
- Numerous account options
- Excellent customer service
- Strong educational resources
- A large offering of no-transaction-fee mutual funds
- Low default cash sweep rate
Given its history, links to the military, and trusted reputation, it is safe to say that USAA Investments opinions are positive and the platform is not in any way a scam. Similarly, Charles Schwab is one of the most professional and highly regarded brokerage services on the market, especially when compared to smaller rivals, such as those found in our Zacks Trade review.
In fact, Charles Schwab is regulated by the most important financial bodies in America, namely the SEC and FINRA. Our USAA Investments review also found that Charles Schwab is registered under the Securities Investor Protection Corporation – which means that traders have additional insurance and can rest assured that, as with the USAA Investments open account, a Charles Schwab account is extremely well protected. Finally, Charles Schwab is also backed by Lloyd’s of London’s contingency policy, which offers additional insurance on top of that provided by the SIPC.
Since being acquired by Charles Schwab, our USAA Investments USA review found that there have been significant improvements to the trading tools, information resources and customization options available.
The Charles Schwab website offers a straightforward and easy to use interface, offering a good selection of basic trading tools and information resources. Users will find they can easily access charts, analyst ratings, financial education and account information via the menu bar at the top of the screen.
Our USAA Investments review USA was impressed with the information resources offered. Users have access to real-time news and earnings reports, a variety of research reports and market commentary authored by in-house experts.
In terms of its overall appearance, the USAA Investments USA website is well laid out with a pleasing color scheme. You might like to compare this with a couple of alternatives aimed at the newcomer or younger investor. Our SoFi Invest review and Stash review both offer a simple interface by way of a comparison.
Opening an account with USAA Investments USA is now handled entirely by Charles Schwab. You do not need to be an existing member of USAA to open a trading account, though many of USAA’s other financial services, such as pensions and insurance remain available exclusively to military and service personnel. Clicking on the USAA investment open account tab on the USAA website will now redirect you to the equivalent page on Charles Schwab.
Whilst there were previously several USAA Investments open account options, Charles Schwab offers just two: a single brokerage account and a joint brokerage account. You do not need either an existing Charles Schwab checking account or a USAA Investments open account to start trading with Charles Schwab.
With a Charles Schwab account, you can trade all the same securities and assets you could with a USAA Investments open account, including:
Our USAA Investments review found that there are no additional services or products offered to USAA members through the Charles Schwab brokerage account.
If you had intended to open a USAA Investments open account, whether you are a member or not you may find that Schwab offers a superior service. You can follow the link to open an account on the USAA website, which will then redirect you to Schwab where you will be required to input a few details. The website claims the process can be completed in around ten minutes, provided you have the necessary documents to hand. To open an account, you will require the following:
- Social security number(s)
- Driver’s license
- Employer’s name and address (if applicable)
- Statement information for any assets or cash you’d like to transfer
Our USAA Investments review also notes that, once you have set up a broker account on Charles Schwab, you can access it automatically via the USAA website and link it to any other USAA Investments open account you may have.
The original USAA Investments USA platform offered a pretty basic trading platform which, whilst offering plenty of functionality, had started to appear a little dated. Charles Schwab has effectively turbocharged the trading environment for former USAA Investments open account holders, by offering three distinct platforms to suit everyone from the novice trader to the seasoned pro.
The three platforms offered by Charles Schwab are the web-based CharlesSchwab.com platform, along with the industry-renowned StreetSmart Edge and StreetSmart Central. Each offers a different level of functionality, with StreetSmart Edge being the go-to choice for more experienced traders and StreetSmart Central being something of a middle ground. For this USAA Investments review, we will focus on the web platform, as this is the most accessible option and is unique to Charles Schwab.
Trading on the Charles Schwab trading platform
The web trading platform is clean and intuitive. It presents a large amount of information and all the tools that beginner and intermediate traders are likely to require, most of which can be accessed by the clearly labeled tabs along the top of the screen. There is plenty of support available and the interface is generally well-designed and easy to get to grips with.
Clicking on the ‘Trade’ tab will take you to the main trading screen. Here you will see the following sub-headings for the available assets and securities:
- Stocks & ETFs
- Mutual Funds
The clearly marked tabs, combined with the omnipresent “Trade” button in the top right corner of the screen make executing transactions extremely simple – and quick.
The trading platform also offers quick access to Charles Schwab’s extensive research tools, guidance and information on trading itself, links to different products, and, of course, an account overview. Our USAA Investments review was also impressed that customer service contact options can be quickly accessed via the main trading screen.
USAA Investments USA mobile offering has also been greatly improved since it was acquired by Charles Schwab. The latter offers a consistent and innovative mobile trading experience and is of a similar design to the main web platform. However, our USAA Investments review notes that the mobile trading platform lacks alerts and quotes – which are somewhat important for more active traders.
When it comes to fees, our USAA Investments review found that, once again, things have improved since Charles Schwab took the reins. Opening an account and depositing is now completely free and the high minimum deposit that USAA Investments USA once insisted on is no longer a requirement.
The lack of any minimum deposit requirements will appeal to novice investors, but Charles Schwab also boasts 0% commission for stocks, options, and ETFs, which will no doubt be a major draw for more active traders. That being said, there are fees associated with automated phone trades (up to $5) as well as for broker-assisted trades (up to $25). Charles Schwab also offers thousands of mutual funds that can be traded for free. However, there are some which command high fees of up to $49.95 per purchase.
There were also one or two non-trading fees, including $50 for full transfer out of assets and $25 for partial transfer of assets. All in all, our USAA Investments review found that the new platform offered arguably the most competitive fee structure on the market.
Customer service support is one area in which USAA Investments open account holders might have expected to see a decline after the brokerage was sold off – after all, USAA Investments USA has built its reputation around its military values and high levels of customer support. However, our USAA Investments review found any concerns to be completely unfounded, as Charles Schwab offers comprehensive service across multiple channels.
The Charles Schwab customer service team can be contacted by phone 24/7, and in addition to English, the service is provided in Vietnamese, Spanish, Cantonese, and Chinese.
As is more or less standard these days, the platform also offers a convenient web chat service, which is also available 24/7. The chat tab is visible across most of the website.
Charles Schwab benefits from having several physical branches across the US, so users also have the option of receiving face-to-face support. The website provides a search function to find your local branch, which will also have details of opening hours.
Finally, it is also possible to write to Charles Schwab the old fashioned way – by post. All postal addresses can be found on the website, although there is no indication of response times.
Regulation and deposit protection is an important consideration and one that has naturally come under the microscope since USAA Investments USA sold its brokerage to Charles Schwab – after all, the former had a great deal of accountability and had a strong reputation for reliability. However, as we have already touched upon, Charles Schwab has not cut any corners when it comes to protection and safeguards for its users.
As with USAA Investments USA, Charles Schwab also offers numerous other financial services – including a retail banking service. This means that both are subject to regulation from FINRA and the SEC to ensure they abide by US regulations. This should offer plenty of peace of mind for potential users as to the security of their deposits and account funds.
Charles Schab is also backed up with a policy from Lloyd’s of London, which offers a maximum of $600 million insurance coverage on top of that already provided by SIPC.
The provision of additional services is an area that requires a little more consideration. However, since USAA Investments USA sold its brokerage platform to Charles Schwab, there have been fewer practical changes for the average user than you might think.
Both platforms offer an array of different financial services, including pension schemes, insurance, banking, and real estate services. However, many of USAA Investment USA’s products were available exclusively to service personnel. In fact, it was something of an anomaly that the brokerage service was available to civilian investors.
Charles Schwab, on the other hand, offers its full range of services to all of its members. In addition, USAA members will still have access to all of their existing products. Schwab customers will also have access to the broker’s impressive educational resources, including comprehensive and reliable advice from a team of experts and the opportunity to attend investing workshops and seminars to build financial awareness.