Charles Schwab SCHW and Interactive Brokers Group IBKR are two prominent online brokerage firms offering commission-free trading platforms. Of late, both have been benefiting from heightened market volatility and increased retail investor participation.
While Schwab remains a powerhouse in wealth management, offering a full-service ecosystem trusted by millions of long-term investors, IBKR is a pure-play electronic brokerage player that serves more advanced traders with its comprehensive tools.
With both firms witnessing increases in trading revenues since the beginning of this year, investors are bullish on their near-term growth prospects amid a favorable trading backdrop. So far this year, shares of Schwab have gained 31.4% and the Interactive Brokers stock has rallied 43.3%. Both stocks have fared better than the industry, the Zacks Finance sector and the S&P 500 Index in the same time frame.
Image Source: Zacks Investment Research
Therefore, the question arises: which brokerage stock — Schwab or Interactive Brokers — offers greater upside in the evolving trading market? Let us break down their fundamentals, financial performance, growth prospects and more before taking any decision.
With $10.8 trillion in total client assets (as of June 30, 2025) and a dominant position in both retail brokerage and advisor custody, Schwab benefits from deep client relationships and recurring revenue streams. Its acquisition of TD Ameritrade (“TDA”) in 2020 solidified its leadership among retail and institutional investors.
A key strength of SCHW is its diversified revenue base, which includes net interest income (NII), asset management fees and advisory services fees. Higher interest rates have significantly boosted the company’s net interest margin (NIM). Its focus on repaying high-cost bank supplemental funding balances will further drive NIM in the near term. By June 2025-end, the bank’s supplemental funding balance was down 70% to $27.7 billion from the peak of $97.1 billion recorded in May 2023.
Schwab’s registered investment advisor (RIA) custody business is one of the largest in the United States, and demand for independent advisors continues to grow. The integration of TDA enhanced the company’s ability to scale and serve this high-margin segment.
SCHW has been quietly modernizing its platform to appeal to younger investors, with improved digital tools and plans to launch spot Bitcoin and Ethereum trading by mid-2026. This move aligns with changing investor behavior, as clients seek diversification. The company’s scale and trusted platform position it well to serve as a bridge between traditional finance and digital assets, especially as cryptocurrency adoption becomes increasingly mainstream.
