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Free overnight checks. Free cashier's checks. Free wire transfers (incoming and outgoing)...on top of what was already free. This is great! For those of you co
by whitepoplar 8y ago
Free overnight checks. Free cashier's checks. Free wire transfers (incoming and outgoing)...on top of what was already free. This is great!
For those of you comparing Fidelity and Schwab for cash management, two things:
1) Fidelity's debit card also reimburses ATM fees worldwide, but lists a 1% foreign transaction fee for purchases. This doesn't apply to ATM withdrawals, which don't count as purchases and are, in fact, 0%.
2) Schwab's interest rate on cash in their checking account is 0.25% last time I checked. Fidelity's is similar, but they count purchased money market funds as liquid, withdrawable cash, and automatically liquidate shares when needed without intervention by you. So the effective interest rate on cash is somewhere between 1.55% and 1.9%, depending on which money market fund you choose. Schwab also has money market funds, but they're not treated as liquid cash. You must manually sell shares, wait until settlement clears, and then transfer funds into your checking account, which is a pain in the ass.
3) Not directly related to cash management, but useful nonetheless: Fidelity advertises $4.95 brokerage trades. Every time I've called and asked, "Can you give me free trades?," they give me free trades (usually 10-20) as a "goodwill" perk. It's a 60 second phone call. Don't pay for trades!
EDIT: Perhaps notable for those who live in high tax states like NY or CA, interest income from Fidelity's "Treasury Only" money market funds is exempt from state taxes. Interest earned from a typical checking account or CD is state taxable. You can also purchase municipal money market funds which are exempt from state and federal taxes, but they have a lower yields.
- rconti 8y agowow!
- pbreit 8y agoIn your estimation are Schwab or Fidelity viable primary bank accounts?
- astura 8y agoYes, they absolutely 100% are. Source: Fidelity is my primary bank account. A bonus is I get paid a day early, Fidelity makes my paycheck available a day before payday for some reason.
- whitepoplar 8y agoYep, I've been a customer of both Fidelity and Schwab and both have been fantastic replacements for brick and mortar banks. The only catch is dealing with cash deposits, but that can be easily mitigated by keeping a no-fee bank account with branches and/or ATMs locally. I use Capital One 360 for that. Also, both Fidelity and Schwab offer 24/7 customer service, and both have live chat if you don't want to wait on the phone.
- bitcoinmoney 8y agoDo you know if schwab high investor yield checking bank account has 1% foreign transaction fee? I have both Fido cash mag and schwab HIY account.
- whitepoplar 8y agoSchwab's debit card is 0% for both international ATM withdrawals and other purchases. Fidelity's debit card is 0% for international ATM withdrawals, but 1% for other purchases.
- JauntTrooper 8y agoSchwab's been my primary bank account for 10 years. It's fantastic.
- astura 8y agoI haven't heard about the money market fund thing. Can you buy money market funds in your cash management account? Or do you have to hold them in your brokerage account and they automatically liquidate them and move them to the cash management account when you (say) withdraw cash? Or do you have to get checkwriting privileges on your brokerage account? Also, free wire transfers? That sounds almost unbelievable.
- whitepoplar 8y agoYes, you can hold money market funds directly in a cash management account. That's what I do. They're treated exactly as cash, so under the tab "Available to withdraw," all money market funds are included in that number.
- astura 8y agoThank you very much! Does the Regulation D six withdraw a month limit apply? Might depend on the money market fund you choose?
- whitepoplar 8y agoNope, does not apply to money market funds as far as I know. You can always double check with Fidelity live chat/phone support.
- whitepoplar 8y agoI just confirmed that Reg D doesn't apply to money market funds in Fidelity cash management accounts, since technically, they're not bank accounts, but brokerage accounts with banking features. This is probably why Schwab doesn't offer the same feature, because Schwab is a bona fide bank and offers true bank accounts to complement their brokerage accounts.
- atomi 8y agoI finally get an opportunity to vent about Schwab. Schwab is the worst.
- JadeNB 8y agoThat's insufficient venting! Why is Schwab the worst? (I am a Fidelity customer who just kind of fell into holding funds with them, and I'd like to know why other options are good or bad.)
- spacehome 8y agoI want to vent about Schwab, too. I've been using Schwab for years now, and they're pretty OK.
- throwaway82729 8y agoThey have all this but no 2FA. Also, their password limit was like 8 or 10 characters till recently.
- whitepoplar 8y agoThis is incorrect. They have 2FA available via the Symantec VIP Access app. It's not U2F or Google Authenticator, but it works.
- nirvdrum 8y agoIs there any particular department you speak with to get free trades? Based on your comment, I just gave it a shot and was told they don't do free trades and the person I spoke with was confused as to why I would even ask.
- whitepoplar 8y agoI generally talk to the people in charge of account transfers. "Hey, so I've had accounts at Fidelity for a while and am wondering if you have any promotions for a couple free trades." "We only have promotions for clients bringing in over $50k, but as a goodwill measure, I can add 10 free trades to your account, would that be okay?" "Cool, thanks, that works. Hope you have a great day!"
- anonu 8y agoIt's probably dependant on your trading history and general account balance.
- bscphil 8y ago>So the effective interest rate on cash is somewhere between 1.55% and 1.9%, depending on which money market fund you choose. Wait, so are you saying you can get up to 1.65% interest on a withdrawable cash fund? Perhaps I'm confused - are you including a penalty for liquidating the shares in that, or just assuming you never liquidate? I'm getting slightly better than that, but that's in a 5 year CD with a large minimum deposit. The penalty for liquidating is the previous 6 months of interest.
- LeifCarrotson 8y agoThere are lots of credit unions that have 3% or better checking accounts: https://www.lmcu.org/personal/banking/checking-accounts/max-checking/ https://www.lmcu.org/personal/banking/checking-accounts/max-... https://www.myconsumers.org/personal/checking https://www.myconsumers.org/personal/checking No penalties for liquidating, some minor requirements (use it for at least one bill and a couple purchases each month) to get the interest rate each month.
- whitepoplar 8y agoYes, my figures are for money market funds. They are withdrawable cash. No penalties. Plop money in, take it out whenever you want (or not).
- inyourtenement 8y agoAlly Bank savings accounts just went to 1.8%, and 2 year CDs are 2.5%, with no minimums.
- whitepoplar 8y ago2 year treasuries are 2.64% and they're exempt from state taxes.
- tanderson92 8y agoAnother thing to note is that Fidelity and Schwab both have commission-free secondary-market treasury trading. This is much preferred to savings account rates. Oh and they allow you to participate in Treasury auctions too; you receive the so-called "high-rate" as a non-competitive bidder.
- whitepoplar 8y agoYes! Fidelity even offers the option to "auto roll" treasuries and I believe CDs, so you can stay 100% invested without thinking about it. Great alternative to a government bond fund.