5 ms·

> My benchmark is Charles Schwab Bank, which offers free ATM fees on any ATM, anywhere. It's what many millennials that I know use. But, it's a bad product and

> My benchmark is Charles Schwab Bank, which offers free ATM fees on any ATM, anywhere. It's what many millennials that I know use. But, it's a bad product and not very user-friendly. Why do you say it's a bad product? I use Schwab as my main account and it works great for me.

byproxy 8y ago
I'm also using Schwab as my main account and for the most part enjoy it. It's not as (seemingly) simple and intuitive as the other products philip1209 mentioned, though. It's a well-established bank/brokerage firm, and it shows in the UI.
stilky 8y ago
Same here, they also have very good service. 24/7 chat assistance and I haven't waited for more than 30 seconds to be connected to a customer service representative.
philip1209 8y ago
I love Schwab's checking account product because it's highly functional. But, I don't think that it has mass-market appeal. It appeals to a rational buyer, not an emotional one. The opportunity here for a startup bank is to replace credit card spending in the USA. The potential earnings are huge if you can get consumers to spend on a debit card instead of a credit card (because the rake is higher). To make a checking account capture the spending market in the USA, it needs to feel premium and focused - like the Amex app. The spending analysis needs to be great, the card needs easy control in the mobile app, and it needs to inspire confidence. It also needs to feel like a trusted, approachable brand. Schwab makes most of their money on investments. I don't foresee them trying to give mass-market appeal to their checking account, separate from the investment account. A case study in this field is Marcus, a savings app from Goldman Sachs. If Schwab spun out their checking account into a separate sub-brand with branding that appeals to millennials and had a spending-focused mobile app, I could see them doing really well: https://www.marcus.com/us/en/savings https://www.marcus.com/us/en/savings
- soupsranjan 8y ago
  > The opportunity here for a startup bank is to replace credit card spending in the USA. The potential earnings are huge if you can get consumers to spend on a debit card instead of a credit card (because the rake is higher). I think the converse is true. Card issuers earn 1 percent points higher interchange rates on credit cards (2.60%) than debit cards (1.60%).
  - alexhutcheson 8y ago
    Once the bank has more than $10 billion in assets, they legally have to reduce their debit card swipe fees to 0.05%.
- kevindong 8y ago
  > I love Schwab's checking account product because it's highly functional. But, I don't think that it has mass-market appeal. It appeals to a rational buyer, not an emotional one. Isn't that the wrong perspective on a financial product? I agree that good design is important, to a degree. Once a certain level is hit, you're not going to gain/lose very many customers based upon the UI. I don't think anyone should favor one bank over another for emotional reasons Also, I'm not sure design differences qualifies as "emotional"; I think a better word would be "design" or "aesthetic". If Bank A offers you a 4% interest rate on a loan and Bank B offers you a 4.1% interest rate on a loan, I think most people would pick Bank A over Bank B (assuming fee structures and customer service is more or less equal). Even if Bank B has a beautiful UI as opposed to Bank A's equally functional but okay looking UI.
  - bojo 8y ago
    By "emotional" vs. "rational" the parent is probably referring to the type of investor/trader that would use a Schwab account, meaning someone who understands the risks they are taking on and won't flinch when the market goes sideways. Nothing to do with UI or product design.
  - cco 8y ago
    A coworker looked over my shoulder as I was signing up for Robinhood checking today, saw the American flag debit card and literally yelled, "I NEED THAT CARD!". He signed up using my referral code, you have to learn that you're not the normal consumer.
brobinson 8y ago
Schwab is excellent. Their "high-yield" (lol) investor checking/brokerage account is a good offering due to no minimums, unlimited foreign ATM fee rebates, unlimited checks, etc. Their customer support is amazing. Three rings and a human picks up the phone. My direct deposits go there, but I moved all my investments over to Interactive Brokers since Schwab doesn't offer (to my knowledge) portfolio margin and Schwab's margin rates are usurious.
- pbk1 8y ago
  Just out of curiosity how do you employ margin in your personal investment portfolio?
  - brobinson 8y ago
    I have risk management parameters for all the positions in my portfolio and for my portfolio overall. I use the kelly criterion to size my trades (beta-hedged intra-sector constituent spread trades). Margin is just additional capital I can allocate and get a slightly smaller return on. I'm about 1.5x leveraged on equities and 6x on forex right now.
- parent5446 8y ago
  FWIW, Schwab does have portfolio margin, although I have no idea what the rates are.
  - brobinson 8y ago
    Good to know, but AFAIK portfolio margin doesn't give you different margin _rates_ anywhere... Schwab is almost 10% starting vs IB's 3.6% right now
dillondoyle 8y ago
My experience as well. Schwab customer service compared to my other checking is consistently and notably better. For me the killer is no foreign transaction fees. If Robinhood allows world wide ATM + no foreign transaction fees I'd switch in a heartbeat. I dont use Schwab for equities, I use Robinhood & Wealthfront
callalex 8y ago
I use Scwhab "high yield" (lol) as my primary checking account. I find it worthwhile due to the simple requirements/no worry of random fees, and because I can walk up to any crappy atm anywhere in the world and just get money without thinking about it. My experiences with customer service have been positive. But their approach to security is an absolute joke. They're an online-only bank, that stores your password in plaintext (and don't allow your passwords to be more than 8 characters/have any non-alphanumeric characters), regularly asks you to type your social security number over the phone, and have such poor fraud detection that I have their IVR memorized to just get them to leave me alone because they have cried wolf so many times.

byproxy 8y ago

I'm also using Schwab as my main account and for the most part enjoy it. It's not as (seemingly) simple and intuitive as the other products philip1209 mentioned, though. It's a well-established bank/brokerage firm, and it shows in the UI.

stilky 8y ago

Same here, they also have very good service. 24/7 chat assistance and I haven't waited for more than 30 seconds to be connected to a customer service representative.

philip1209 8y ago

I love Schwab's checking account product because it's highly functional. But, I don't think that it has mass-market appeal. It appeals to a rational buyer, not an emotional one. The opportunity here for a startup bank is to replace credit card spending in the USA. The potential earnings are huge if you can get consumers to spend on a debit card instead of a credit card (because the rake is higher). To make a checking account capture the spending market in the USA, it needs to feel premium and focused - like the Amex app. The spending analysis needs to be great, the card needs easy control in the mobile app, and it needs to inspire confidence. It also needs to feel like a trusted, approachable brand. Schwab makes most of their money on investments. I don't foresee them trying to give mass-market appeal to their checking account, separate from the investment account. A case study in this field is Marcus, a savings app from Goldman Sachs. If Schwab spun out their checking account into a separate sub-brand with branding that appeals to millennials and had a spending-focused mobile app, I could see them doing really well: https://www.marcus.com/us/en/savings https://www.marcus.com/us/en/savings

soupsranjan 8y ago
> The opportunity here for a startup bank is to replace credit card spending in the USA. The potential earnings are huge if you can get consumers to spend on a debit card instead of a credit card (because the rake is higher). I think the converse is true. Card issuers earn 1 percent points higher interchange rates on credit cards (2.60%) than debit cards (1.60%).
- alexhutcheson 8y ago
  Once the bank has more than $10 billion in assets, they legally have to reduce their debit card swipe fees to 0.05%.
kevindong 8y ago
> I love Schwab's checking account product because it's highly functional. But, I don't think that it has mass-market appeal. It appeals to a rational buyer, not an emotional one. Isn't that the wrong perspective on a financial product? I agree that good design is important, to a degree. Once a certain level is hit, you're not going to gain/lose very many customers based upon the UI. I don't think anyone should favor one bank over another for emotional reasons Also, I'm not sure design differences qualifies as "emotional"; I think a better word would be "design" or "aesthetic". If Bank A offers you a 4% interest rate on a loan and Bank B offers you a 4.1% interest rate on a loan, I think most people would pick Bank A over Bank B (assuming fee structures and customer service is more or less equal). Even if Bank B has a beautiful UI as opposed to Bank A's equally functional but okay looking UI.
- bojo 8y ago
  By "emotional" vs. "rational" the parent is probably referring to the type of investor/trader that would use a Schwab account, meaning someone who understands the risks they are taking on and won't flinch when the market goes sideways. Nothing to do with UI or product design.
- cco 8y ago
  A coworker looked over my shoulder as I was signing up for Robinhood checking today, saw the American flag debit card and literally yelled, "I NEED THAT CARD!". He signed up using my referral code, you have to learn that you're not the normal consumer.

brobinson 8y ago

Schwab is excellent. Their "high-yield" (lol) investor checking/brokerage account is a good offering due to no minimums, unlimited foreign ATM fee rebates, unlimited checks, etc. Their customer support is amazing. Three rings and a human picks up the phone. My direct deposits go there, but I moved all my investments over to Interactive Brokers since Schwab doesn't offer (to my knowledge) portfolio margin and Schwab's margin rates are usurious.

pbk1 8y ago
Just out of curiosity how do you employ margin in your personal investment portfolio?
- brobinson 8y ago
  I have risk management parameters for all the positions in my portfolio and for my portfolio overall. I use the kelly criterion to size my trades (beta-hedged intra-sector constituent spread trades). Margin is just additional capital I can allocate and get a slightly smaller return on. I'm about 1.5x leveraged on equities and 6x on forex right now.
parent5446 8y ago
FWIW, Schwab does have portfolio margin, although I have no idea what the rates are.
- brobinson 8y ago
  Good to know, but AFAIK portfolio margin doesn't give you different margin _rates_ anywhere... Schwab is almost 10% starting vs IB's 3.6% right now

dillondoyle 8y ago

My experience as well. Schwab customer service compared to my other checking is consistently and notably better. For me the killer is no foreign transaction fees. If Robinhood allows world wide ATM + no foreign transaction fees I'd switch in a heartbeat. I dont use Schwab for equities, I use Robinhood & Wealthfront

callalex 8y ago

I use Scwhab "high yield" (lol) as my primary checking account. I find it worthwhile due to the simple requirements/no worry of random fees, and because I can walk up to any crappy atm anywhere in the world and just get money without thinking about it. My experiences with customer service have been positive. But their approach to security is an absolute joke. They're an online-only bank, that stores your password in plaintext (and don't allow your passwords to be more than 8 characters/have any non-alphanumeric characters), regularly asks you to type your social security number over the phone, and have such poor fraud detection that I have their IVR memorized to just get them to leave me alone because they have cried wolf so many times.