Best Hub Bank

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CompareContrast
Posts: 48
Joined: Sun Sep 05, 2010 9:08 pm

Best Hub Bank

Post by CompareContrast » Sat Apr 18, 2020 4:47 pm

A hub bank links to a set of bank accounts as well as various other sundry financial institutions. Here's an article from depositaccounts listing good features of a hub bank. (I disagree with #3 - I don't want links to be too easy to set up, and even #7 - hold times can protect your funds.)

1. I am currently using USAA Bank for this purpose. I am thinking of supplementing them with another for various reasons. I perceive that USAA's customer service, while above average, is no longer as stellar as it was 10 years ago. They vastly expanded their customer and deposit base, and service got compromised.

Last year, the Office of the Comptroller (OCC) ordered USAA to upgrade their risk management and internal controls. The Consumer Financial Protection Bureau (CFPB) fined them $3.5 million and ordered $12 million restitution for customers who had their stop payment requests neglected and their accounts re-opened without their permission. https://www.americanbanker.com/news/usa ... n-security

USAA is making progress on this front (they did a bunch of hires last summer) but I'm inclined to open a backup hub account.

2. Ally has a big fan base on this website. Check out these links:
Why Ally Bank
Ally Bank's nightmarish online reviews -- should I be worried? (A: No, they mostly reflect folks who've had bitter experiences with auto loans, often not Ally's fault.)

There's one hitch though. Some people might find themselves occasionally breaching the $250,000 FDIC limit. At that point, you start to worry about the solvency of the underlying institution: you are a bond investor. USAA has an Aaa rating from Moody's, which is extraordinarily high, and AA+ from S&P. Let's look at a few others:

AAA USAA. Tops.
AA1
AA2
AA3 American Express: Long term Deposits
A1 Goldman Sachs (Marcus) Long term deposits
A2 Charles Schwab Bank, Senior Unsecured
Discover Bank: Long term deposit
American Express National Bank: Baseline credit
A3
Baa1
Baa2 Discover Bank: Long term debt
Baa3
Below this point is junk:
Ba1 Ally. Yes: Ally is junk.
Ba2
Ba3
B1
B2
B3

This is as far as I've gotten. I bank with Ally, but I'm wary of using them as a hub. Right now I'm leaning towards Discover Bank, as it is a full service online bank. Marcus and AMEX are also candidates, though apparently they don't like trusts which is an issue for me. I haven't gone through the checklist in Deposit Accounts. What do bogleheads think?

3. Current Marcus (Goldman Sachs) vs. Ally showdown thread: Marcus or Ally

"I find money transfers with Ally are faster - usually 1 business day. Marcus is usually 2 business days."

"Funny - I have had the opposite experience with ACH transfers. ALWAYS 1 day way with Marcus - have had 3 days with Ally. Due to Ally's slow ACH transfers and always lower rates I have stuck with Marcus and moved out of Ally."

"Marcus's ACH system is faster. If you submit it early enough in the morning, you can even get same-day ACH (for $25k and below). Ally can offer you next-day ACH, but it requires you to jump through some hoops and wait for two months when you link a new bank account."

"Marcus does not support trust accounts, or I would probably bank there. You may wish to avoid it if you foresee a trust being part of your estate planning."

4. Capital One gets mentions, but I take it their customer service is sub-par.
"Capital One has a nasty habit of creating a new type of account and only giving good rates on the new accounts."
That would be bad for a hub account, since you would also have to set up new links. CIT also reportedly plays that game.

5. TIAA is another possibility, but their interest rate performance tends to be a little erratic.

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JoMoney
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Re: Best Hub Bank

Post by JoMoney » Sat Apr 18, 2020 4:59 pm

I love my Fidelity CMA account. Technically it's a brokerage, but same feature set as a bank, and the default sweep the money will be transferred to/through is an FDIC insured bank, or a series of them to ensure even high dollar amounts (up to $1.25 mil) won't go over the FDIC limit at any one bank.
Last edited by JoMoney on Sat Apr 18, 2020 5:01 pm, edited 1 time in total.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

02nz
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Re: Best Hub Bank

Post by 02nz » Sat Apr 18, 2020 5:01 pm

I agree USAA service isn't as good as it used to be. But there are some things most other banks don't offer (much of below is copied from my post in another thread):

- Direct deposit seems to come through a day faster than most other banks
- For “pulling” money by ACH from external accounts, the money is made available instantly. The limit is $5K but this is a big advantage over most banks, which often make you wait close to a week before making "pulled" funds available
- I have a USAA credit card linked to the bank account, this provides overdraft protection on the rare occasions I’ve overdrawn the checking account. I pay the credit card right away and have never paid interest charges.
- Mobile deposit has a pretty high limit at $100K daily, whereas other banks I’ve used have limits as low as $2K or $5K per check or some higher amount per 30-day period
- Reimbursement of ATM fees
- ATMs at many CVS locations

I use Ally and Marcus for savings and CDs, but between the above and the inertia of having my bill pay already set up with USAA, I'm unlikely to make a change, especially because I don't need that much "service" from a bank, just a functional website/app, free of errors on transactions, and there I've had no issues with USAA.

mega317
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Re: Best Hub Bank

Post by mega317 » Sat Apr 18, 2020 5:16 pm

I think you're thinking about this a little too hard. You're switching because customer service at usaa is only above average? Any bank is going to have its share of positive and negative reviews and experiences. Does 1 vs 2 days matter to you for ach? You already have at least two banks, why the need for another? Or, what's the problem with a third?

I wouldn't exceed fdic anywhere no matter the ratings.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

nix4me
Posts: 595
Joined: Sat Oct 13, 2018 9:32 am

Re: Best Hub Bank

Post by nix4me » Sat Apr 18, 2020 5:25 pm

We have USAA and are very happy with their banking however I am not happy with USAAA with all of their other products. I would switch to Navy Federal in a heartbeat if my other half would let me.

Topic Author
CompareContrast
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Joined: Sun Sep 05, 2010 9:08 pm

Re: Best Hub Bank

Post by CompareContrast » Sat Apr 18, 2020 6:17 pm

JoMoney wrote:
Sat Apr 18, 2020 4:59 pm
I love my Fidelity CMA account. Technically it's a brokerage, but same feature set as a bank, and the default sweep the money will be transferred to/through is an FDIC insured bank, or a series of them to ensure even high dollar amounts (up to $1.25 mil) won't go over the FDIC limit at any one bank.
I assume the FDIC pool is paying something like 0.02% now, but that you can also access a money market fund. Is this correct? Also are there issues with ACH transfers to multiple accounts? (Do they have a routing number? :confused )
mega317 wrote:
Sat Apr 18, 2020 5:16 pm
I think you're thinking about this a little too hard. You're switching because customer service at usaa is only above average? Any bank is going to have its share of positive and negative reviews and experiences. Does 1 vs 2 days matter to you for ach? You already have at least two banks, why the need for another? Or, what's the problem with a third?

I wouldn't exceed fdic anywhere no matter the ratings.
Good questions. I'm occasionally running up against my 6 per month transfer limit for various reasons. So it makes sense for me to branch out a little as it were. USAA pays something like 0.20% or 0.30% now, compared with about 1.50% for high yielding online banks. I anticipate shifting away from money market funds and tbills over the next year or so, assuming that high yielding online banks pay significantly higher rates, as they did during the last financial meltdown of 2007/2008 and afterwards.

Also, I figure a Best Bank thread taken from another angle would help the internet. Bogleheads has been a solid reference for this usual lurker in the past.

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JoMoney
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Re: Best Hub Bank

Post by JoMoney » Sat Apr 18, 2020 6:31 pm

CompareContrast wrote:
Sat Apr 18, 2020 6:17 pm
JoMoney wrote:
Sat Apr 18, 2020 4:59 pm
I love my Fidelity CMA account. Technically it's a brokerage, but same feature set as a bank, and the default sweep the money will be transferred to/through is an FDIC insured bank, or a series of them to ensure even high dollar amounts (up to $1.25 mil) won't go over the FDIC limit at any one bank.
I assume the FDIC pool is paying something like 0.02% now, but that you can also access a money market fund. Is this correct? Also are there issues with ACH transfers to multiple accounts? (Do they have a routing number? :confused )
...
The FDIC bank sweep account is paying .01% , money markets not currently paying much better (Fidelity has high ER's on money markets).
https://accountopening.fidelity.com/ftg ... ?type=fcma
Under better conditions, I was using MM funds and the cash was automatically taken from them if the default sweep account was at zero. Very convenient, but in the current rate environment I can do better. Moved the bulk to a 1.5% high-yield savings account held elsewhere, and it was relatively simple to add it as an external account to transfer to. They do have a limit of $100,000 transfer via online ACH, but I believe you can call them and work through it if you have a need to transfer more in a single ACH transfer.

Yes, it has a routing number
https://www.fidelity.com/cash-managemen ... unt-number
(comes up as UMB , Na)
I have not had any problems linking external accounts at Fidelity, the process can be a bit weird they'll likely ask for a copy of a statement or some other invasive info during the approval process).
It's made for a nice "hub bank" for me, because my local Brick-n-Mortar bank limits ACH transfers to a smaller amount than Fidelity does, so I am able to use the Fidelity account to "pull" the money if it's too high an amount to push it from the other bank.
Transfers are very quick, my payroll direct deposit shows up a day earlier than it's supposed to.
Last edited by JoMoney on Sat Apr 18, 2020 6:33 pm, edited 1 time in total.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

ralph124cf
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Joined: Tue Apr 01, 2014 11:41 am

Re: Best Hub Bank

Post by ralph124cf » Sat Apr 18, 2020 6:33 pm

I think that the first linked article which started the discussion is quite good, however, the date on it is 2010, and much may have changed.

Ralph

Blue456
Posts: 710
Joined: Tue Jun 04, 2019 5:46 am

Re: Best Hub Bank

Post by Blue456 » Sat Apr 18, 2020 6:34 pm

CompareContrast wrote:
Sat Apr 18, 2020 4:47 pm
A hub bank links to a set of bank accounts as well as various other sundry financial institutions. Here's an article from depositaccounts listing good features of a hub bank. (I disagree with #3 - I don't want links to be too easy to set up, and even #7 - hold times can protect your funds.)

1. I am currently using USAA Bank for this purpose. I am thinking of supplementing them with another for various reasons. I perceive that USAA's customer service, while above average, is no longer as stellar as it was 10 years ago. They vastly expanded their customer and deposit base, and service got compromised.

Last year, the Office of the Comptroller (OCC) ordered USAA to upgrade their risk management and internal controls. The Consumer Financial Protection Bureau (CFPB) fined them $3.5 million and ordered $12 million restitution for customers who had their stop payment requests neglected and their accounts re-opened without their permission. https://www.americanbanker.com/news/usa ... n-security

USAA is making progress on this front (they did a bunch of hires last summer) but I'm inclined to open a backup hub account.

2. Ally has a big fan base on this website. Check out these links:
Why Ally Bank
Ally Bank's nightmarish online reviews -- should I be worried? (A: No, they mostly reflect folks who've had bitter experiences with auto loans, often not Ally's fault.)

There's one hitch though. Some people might find themselves occasionally breaching the $250,000 FDIC limit. At that point, you start to worry about the solvency of the underlying institution: you are a bond investor. USAA has an Aaa rating from Moody's, which is extraordinarily high, and AA+ from S&P. Let's look at a few others:

AAA USAA. Tops.
AA1
AA2
AA3 American Express: Long term Deposits
A1 Goldman Sachs (Marcus) Long term deposits
A2 Charles Schwab Bank, Senior Unsecured
Discover Bank: Long term deposit
American Express National Bank: Baseline credit
A3
Baa1
Baa2 Discover Bank: Long term debt
Baa3
Below this point is junk:
Ba1 Ally. Yes: Ally is junk.
Ba2
Ba3
B1
B2
B3

This is as far as I've gotten. I bank with Ally, but I'm wary of using them as a hub. Right now I'm leaning towards Discover Bank, as it is a full service online bank. Marcus and AMEX are also candidates, though apparently they don't like trusts which is an issue for me. I haven't gone through the checklist in Deposit Accounts. What do bogleheads think?

3. Current Marcus (Goldman Sachs) vs. Ally showdown thread: Marcus or Ally

"I find money transfers with Ally are faster - usually 1 business day. Marcus is usually 2 business days."

"Funny - I have had the opposite experience with ACH transfers. ALWAYS 1 day way with Marcus - have had 3 days with Ally. Due to Ally's slow ACH transfers and always lower rates I have stuck with Marcus and moved out of Ally."

"Marcus's ACH system is faster. If you submit it early enough in the morning, you can even get same-day ACH (for $25k and below). Ally can offer you next-day ACH, but it requires you to jump through some hoops and wait for two months when you link a new bank account."

"Marcus does not support trust accounts, or I would probably bank there. You may wish to avoid it if you foresee a trust being part of your estate planning."

4. Capital One gets mentions, but I take it their customer service is sub-par.
"Capital One has a nasty habit of creating a new type of account and only giving good rates on the new accounts."
That would be bad for a hub account, since you would also have to set up new links. CIT also reportedly plays that game.

5. TIAA is another possibility, but their interest rate performance tends to be a little erratic.
What are you looking for out of a bank? Customers service? High yield savings? ACH transfer times? Branches? What's important to you?

Cash
Posts: 1535
Joined: Wed Mar 10, 2010 10:52 am

Re: Best Hub Bank

Post by Cash » Sat Apr 18, 2020 7:35 pm

JoMoney wrote:
Sat Apr 18, 2020 6:31 pm
CompareContrast wrote:
Sat Apr 18, 2020 6:17 pm
JoMoney wrote:
Sat Apr 18, 2020 4:59 pm
I love my Fidelity CMA account. Technically it's a brokerage, but same feature set as a bank, and the default sweep the money will be transferred to/through is an FDIC insured bank, or a series of them to ensure even high dollar amounts (up to $1.25 mil) won't go over the FDIC limit at any one bank.
I assume the FDIC pool is paying something like 0.02% now, but that you can also access a money market fund. Is this correct? Also are there issues with ACH transfers to multiple accounts? (Do they have a routing number? :confused )
...
The FDIC bank sweep account is paying .01% , money markets not currently paying much better (Fidelity has high ER's on money markets).
https://accountopening.fidelity.com/ftg ... ?type=fcma
Under better conditions, I was using MM funds and the cash was automatically taken from them if the default sweep account was at zero. Very convenient, but in the current rate environment I can do better. Moved the bulk to a 1.5% high-yield savings account held elsewhere, and it was relatively simple to add it as an external account to transfer to. They do have a limit of $100,000 transfer via online ACH, but I believe you can call them and work through it if you have a need to transfer more in a single ACH transfer.

Yes, it has a routing number
https://www.fidelity.com/cash-managemen ... unt-number
(comes up as UMB , Na)
I have not had any problems linking external accounts at Fidelity, the process can be a bit weird they'll likely ask for a copy of a statement or some other invasive info during the approval process).
It's made for a nice "hub bank" for me, because my local Brick-n-Mortar bank limits ACH transfers to a smaller amount than Fidelity does, so I am able to use the Fidelity account to "pull" the money if it's too high an amount to push it from the other bank.
Transfers are very quick, my payroll direct deposit shows up a day earlier than it's supposed to.
You can also initiate a wire transfer to any bank account online for free.

othermike27
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Joined: Mon Jun 13, 2016 7:14 am

Re: Best Hub Bank

Post by othermike27 » Sun Apr 19, 2020 8:12 am

OP, you say, "... but I'm inclined to open a backup hub account."

How would you use the backup hub?
- replace: migrate all your links and business from USAA to the backup
- duplicate: recreate all links at the backup so it functions as a true backup to USAA
- divide: split links/business between USAA and the backup hub
- something else?

I use a two-hub approach: a savings/share account at a large credit union (Alliant) with "pretty good" rates for managing major asset shuffling, and a local bricks-and-mortar bank for most public-facing in and out transactions. Most of my money transfer transactions go between these two. The bank's interest rates are dismal flat-lines, but the rest of their services (vault box, notary, medallion signature guarantee, etc.) are worth the trouble of keeping this setup.

Startled Cat
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Re: Best Hub Bank

Post by Startled Cat » Sun Apr 19, 2020 9:04 am

CompareContrast wrote:
Sat Apr 18, 2020 4:47 pm
There's one hitch though. Some people might find themselves occasionally breaching the $250,000 FDIC limit. At that point, you start to worry about the solvency of the underlying institution.
It’s quite straightforward to extend the FDIC coverage limit by adding beneficiaries. For example, if you have up to 5 transfer-on-death beneficiaries listed, the money in accounts associated with those beneficiaries is insured for up to $250k per beneficiary. This is true even if the beneficiaries have unequal shares - for example 99.96% for a primary beneficiary and 0.01% for the others. This coverage would be in addition to the $250k available to a separate set of accounts without transfer-on-death beneficiaries.

https://www.fdic.gov/deposit/deposits/b ... glish.html

Topic Author
CompareContrast
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Re: Best Hub Bank

Post by CompareContrast » Sun Apr 19, 2020 3:39 pm

Blue456 wrote:
Sat Apr 18, 2020 6:34 pm
What are you looking for out of a bank? Customers service? High yield savings? ACH transfer times? Branches? What's important to you?
Simple questions are the best, but often not easy to answer. I imagine a high rate account (not necessarily highest rate account) with low aggravation. Ally would easily qualify, if not for its low bond rating. ACH transfer times aren't a deciding factor for me, though permitting more bank links would be a plus. Branches don't matter for this account. Another consideration would be if the bank offers special services. eg USAA and Schwab refund ATM fees and Capital One has a good credit card for foreign travel (which of course I could get anyway). (Thanks for helping me to clarify my thoughts.)
othermike27 wrote:
Sun Apr 19, 2020 8:12 am
OP, you say, "... but I'm inclined to open a backup hub account."

How would you use the backup hub?
- replace: migrate all your links and business from USAA to the backup
- duplicate: recreate all links at the backup so it functions as a true backup to USAA
- divide: split links/business between USAA and the backup hub
- something else?
Link my Vanguard account to USAA and NewHub Bank. Then use a mix of links to USAA and NewHub, depending upon what financial institutions can do. Yes, I'll have to keep records of that, but again I'm running up against the 6 per month transfer limit at USAA.
The bank's interest rates are dismal flat-lines, but the rest of their services (vault box, notary, medallion signature guarantee, etc.) are worth the trouble of keeping this setup.
Grist for another thread but agreed: I have a fuller service brick and mortar bank as well.

Startled Cat: I'll give that some thought.

Thanks to all for the replies.

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JoMoney
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Re: Best Hub Bank

Post by JoMoney » Sun Apr 19, 2020 3:51 pm

CompareContrast wrote:
Sun Apr 19, 2020 3:39 pm
...Another consideration would be if the bank offers special services. eg USAA and Schwab refund ATM fees and Capital One has a good credit card for foreign travel (which of course I could get anyway). (Thanks for helping me to clarify my thoughts.)
FWIW, the Fidelity CMA also refunds any ATM fees, they also have 2% cash-back visa reward card, that requires having a Fidelity account to deposit the cash-back in (the CMA qualifies for that).
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Blue456
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Re: Best Hub Bank

Post by Blue456 » Sun Apr 19, 2020 4:38 pm

CompareContrast wrote:
Sun Apr 19, 2020 3:39 pm
Blue456 wrote:
Sat Apr 18, 2020 6:34 pm
What are you looking for out of a bank? Customers service? High yield savings? ACH transfer times? Branches? What's important to you?
Simple questions are the best, but often not easy to answer. I imagine a high rate account (not necessarily highest rate account) with low aggravation. Ally would easily qualify, if not for its low bond rating. ACH transfer times aren't a deciding factor for me, though permitting more bank links would be a plus. Branches don't matter for this account.
I’m kind of in the same boat. Not 100% sold on Ally. Don’t like Marcus. Your other options are Capital One. Their customer service is okay to good enough. I think they refund ATM fees but I’m not sure 100%. They do offer good savings and good CDs. Almost makes me want to go back to them. Personally I am okay with Ally for now. I am giving Citi Accelerate Savings a try. I heard their customer service is abysmal but I will churn their checking account bonus at the same time. After that just like you I have not idea who to use. But who knows maybe I will stick with Citi. For me the biggest needs are consistency in terms of savings rates and CDs in which case American Express, Ally, Marcus, Alliant Credit Union and Capital One are the best bets.

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JoMoney
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Re: Best Hub Bank

Post by JoMoney » Sun Apr 19, 2020 5:20 pm

Blue456 wrote:
Sun Apr 19, 2020 4:38 pm
... Your other options are Capital One. Their customer service is okay to good enough. I think they refund ATM fees but I’m not sure 100%. They do offer good savings and good CDs. Almost makes me want to go back to them...
Capital One does not refund ATM fees on their checking, but it is their 1.5% savings account I have linked to my Fidelity CMA (that does refund ATM fees). Capital One is part of a very large ATM network though, so it's easy enough to find a no-fee one. An advantage of using the Capital One checking is you can link it to overdraft to the high-yield savings, and you can instantly transfer money (even on weekends) from the savings to the checking (although limited by the Reg-D 6 withdrawals from savings per month). They also have a 1.5% cash-back reward credit card.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

perikleez
Posts: 115
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Re: Best Hub Bank

Post by perikleez » Sun Apr 19, 2020 5:44 pm

despite it's shortcomings, USAA is still the best bank around if you can become a member. is it perfect and offer everything that meets your banking needs? unlikely, but same goes for every bank. have you tried NFCU or multiple banks approach? i have a bank that will push direct deposits 3-4days from expected deposit date, another bank that I use to pay fixed reoccurring living expenses, and another online bank that I use the debit card for day-to-day debit card expenses.

can i connect them and my other financial accounts on USAA as a hub? yes, and I have in the past but i stopped after it became obvious that bank representatives could see all your linked accounts when they were helping me out with a transaction. and yes you can get better service when they have a better idea of your financial assets, but best to be selective in those disclosures.

having multiple banks is also similar to the idea of don't put all your eggs in one basket theory

Boatguy
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Re: Best Hub Bank

Post by Boatguy » Sun Apr 19, 2020 7:07 pm

Startled Cat wrote:
Sun Apr 19, 2020 9:04 am
CompareContrast wrote:
Sat Apr 18, 2020 4:47 pm
There's one hitch though. Some people might find themselves occasionally breaching the $250,000 FDIC limit. At that point, you start to worry about the solvency of the underlying institution.
It’s quite straightforward to extend the FDIC coverage limit by adding beneficiaries. For example, if you have up to 5 transfer-on-death beneficiaries listed, the money in accounts associated with those beneficiaries is insured for up to $250k per beneficiary. This is true even if the beneficiaries have unequal shares - for example 99.96% for a primary beneficiary and 0.01% for the others. This coverage would be in addition to the $250k available to a separate set of accounts without transfer-on-death beneficiaries.

https://www.fdic.gov/deposit/deposits/b ... glish.html
Didn’t know about those different variations around FDIC insurance. Thanks for the link.

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jakehefty17
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Location: New York

Re: Best Hub Bank

Post by jakehefty17 » Mon Apr 20, 2020 10:21 am

I'm also considering this question, I want to use an online hub bank for a checking & savings account. I'd keep this account for the long term.

This combined with BoA/ME (credit cards/taxable account) and FIDO CMA (money market checking/Roth IRA) should cover all my bases. I also have an account with a local credit union for my mortgage (good for notary or loan needs).

I'm back and forth between Ally and Capital One 360. Not sure which to pick.
"The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence." -Charles Bukowski

Topic Author
CompareContrast
Posts: 48
Joined: Sun Sep 05, 2010 9:08 pm

Re: Best Hub Bank

Post by CompareContrast » Sun Apr 26, 2020 4:20 pm

If you want an online bank with a high rate, the go-to place is bankrate.com. Depositaccounts.com is also good. Here, I'm looking for a competitive rate alongside good customer service. In the next exercise, I take Consumer Report's rating for online banks, and add columns for current savings rates (assuming a $50,000 balance) and my own comments:

Code: Select all

 
Online Bank    Overall|Customer|Website|Ease of| Savings Rate|	My Comments
               Reader |Service         online    |@ $50,000
               Score   |               transactions  

USAA		96	5	5	5	0.30%	Decline in service, I”d say “4”
Schwab Bank	94	5	5	5	0.05%	
Ally		93	4	5	5	1.50%	Junk Bond Credit rating beyond 250K limit
Discover Bank	92	4	5	4	1.40%	
EverBank	91	5	5	5	1.25%	Now TIAA bank. Yield pledge top 5%
Synchrony Bank	90	3	4	4	1.50%	
State Farm Bank	90	4	4	4	0.25%-0.75%	NA: US Bank purchases State Farm Bank
Capital One 360	90	4	5	4	1.50%	Baits and switches high yield accounts
E*Trade Bank	90	4	5	4	0.20%	
 
Some of the data is no longer applicable due to merger. Online banks with better customer service and rates above 1.00% are Ally, Discover, TIAA, and Capital One. I exclude Ally because of its low bond rating and Capital One due its tendency to offer a new higher rate account while deprecating their old accounts. YMwillV which is totally ok.

So that leaves Discover and TIAA in the finals. I'll add that Discover Bank has a relationship with AAII which gives it's members and additional .05% FWIW (not much). TIAA is a member-friendly financial institution like Vanguard, which is a plus for them.

Topic Author
CompareContrast
Posts: 48
Joined: Sun Sep 05, 2010 9:08 pm

Re: Best Hub Bank

Post by CompareContrast » Fri Jun 26, 2020 3:53 pm

I ended up choosing TIAA, FWIW. They've been ok, though their website feels a little primitive.
I am resurrecting this thread to add comments on Capital One and USAA.

Capital One deserves a 2nd look. I'll start with their disadvantages:
2020 ButClassic wrote:
Fri Apr 17, 2020 11:42 am
02nz wrote:
Mon Apr 06, 2020 3:22 pm
Capital One has a nasty habit of creating a new type of account and only giving good rates on the new accounts. Easy to move your money if you pay attention, but most people don't. The bonuses are also limited to customers that haven't had an account in 4 years or so. Ally, Marcus, etc. tend to make current customers eligible as long as they bring in new money.

ETA: Capital One also has an annoyingly glitchy website. About half the time when I want to change the date on a scheduled transfer or bill pay it will just error out for no apparent reason.
Agreed. They changed the web site to a cuter version over a year ago and it works poorly. I had to call them to make some basic transactions.

And they removed two different types of savings accounts I had and now have replacements. They dropped the interest rates on the older ones, presumably to force the customers to get out of them. Giving heads-up to customers would have been nice.
Capital One 360 has a unique advantage though: as far as I know they are the only high rate bank that has superior 2 factor authentication. Other financial institutions rely on insecure text messages to cell phones. Those are vulnerable to SIM swaps where the bad guys use social engineering or outright bribery to transfer your cell number to another cell phone, then rob your accounts. This happens. Here's a not entirely viable fix for the problem.

Ok, here's the list of banks offering two factor authentication. As far as I can tell, the only high yield bank offering the "Hardware token" or "Software token" option is Capital One 360. (Corrections welcome.)

(I see that Vanguard has a hardware token option. They call it a security key: they use yubico. "There are a few different types, so be sure to select one that Vanguard supports: Security Key Series (Yubico), YubiKey 4 Series, and YubiKey 5 Series (excludes YubiKey 5Ci).")

Overthinking? Overkill? That's what I do! More seriously, I hope these threads are helpful and maybe even help nudge the industry slightly forward.

Topic Author
CompareContrast
Posts: 48
Joined: Sun Sep 05, 2010 9:08 pm

Re: Best Hub Bank

Post by CompareContrast » Fri Jun 26, 2020 4:00 pm

And now for a USAA FYI/PSA:

USAA asked for my net worth and income: potential customers should know that they interpret federal law rather broadly. I'll walk through the messages I received from them:
Action Required

You have 3 more times to answer the required questions before mobile and online access to your account is restricted.
We need some information, John Doe.

To comply with federal law and regulations, we are required to obtain additional information about you and/or your account. Completion of this questionnaire is required. You may by-pass this message three times before your online access will be restricted. This means that electronic access to documents, such as your account statements, and the ability to conduct any transactions or to view your account online will be suspended.

Completion of the questionnaire is required to access your account online. Please contact USAA at 210-531-USAA (8722) for more information regarding your account.

To Be Answered Estimated Time To Complete
Questions About You 1-3 Minutes
SAVINGS 1-5 Minutes
CHECKING 1-5 Minutes
There are threads about this at reddit from about a year ago. The above verbiage is misleading, as Know Your Customer requirements don't *necessarily* require that they ask about your net worth and income. Interpretation is left to the financial institution. Via google I see that Chase and USAA are particularly demanding. Bank of America generally permits you to tell them to buzz off.

Here I'll list the questions they ask.
Questions About You
What's your estimated net worth?

What's your annual income?

Are you a current or former high-level elected or appointed FOREIGN government official, or a relative or close associate of one? Yes No

[Next page: you can't click forward until you answer all questions.]

Saving:
Where do you think most of your future deposits will come from?

[Next page: you can't click forward until you answer all questions.]

Checking:
Will more than $5000 in cash be withdrawn monthly?

Will international transfers be sent from this account.

Will cash equivalents be deposited in this account?
How many times will cash equivalents be deposited?
How much in cash equivalents will be deposited each month?

Will cash be deposited in this account?

How are you going to use the checking account?

Will International transfers be received by this account?

Where do you think most of your future deposits will come from?

[Next page: you can't click forward until you answer all questions.]

Thank you, we look forward to continuing to serve you.
Those who find this needlessly intrusive can bear this in mind. USAA also puts a dollar cap on the amount you can send out to certain financial institutions on a single day.

mptfan
Posts: 6043
Joined: Mon Mar 05, 2007 9:58 am

Re: Best Hub Bank

Post by mptfan » Fri Jun 26, 2020 4:07 pm

CompareContrast wrote:
Fri Jun 26, 2020 3:53 pm
Ok, here's the list of banks offering two factor authentication. As far as I can tell, the only high yield bank offering the "Hardware token" or "Software token" option is Capital One 360. (Corrections welcome.)
I looked at that list and it does not indicate that Capital One 360 offers hardware token.

Does anyone know if there are any banks in the U.S. that support using physical FIDO U2F security keys (most common brand is Yubikey) for two factor authentication?
Last edited by mptfan on Fri Jun 26, 2020 10:24 pm, edited 1 time in total.

tj
Posts: 2943
Joined: Thu Dec 24, 2009 12:10 am

Re: Best Hub Bank

Post by tj » Fri Jun 26, 2020 4:39 pm

I've used alliant credit union for 10 years. The rates aren't what they used to be. They have fast ACH and mobile check deposit is easy, the only annoying part is that scanned copies of the checks don't seem to be linked to the deposits. It's complacency that I haven't changed. I'm not aware of who would be obviously superior.

nix4me
Posts: 595
Joined: Sat Oct 13, 2018 9:32 am

Re: Best Hub Bank

Post by nix4me » Fri Jun 26, 2020 5:50 pm

Navy Federal

Topic Author
CompareContrast
Posts: 48
Joined: Sun Sep 05, 2010 9:08 pm

Re: Best Hub Bank

Post by CompareContrast » Fri Jun 26, 2020 7:05 pm

mptfan wrote:
Fri Jun 26, 2020 4:07 pm
CompareContrast wrote:
Fri Jun 26, 2020 3:53 pm
Ok, here's the list of banks offering two factor authentication. As far as I can tell, the only high yield bank offering the "Hardware token" or "Software token" option is Capital One 360. (Corrections welcome.)
I looked at that list and it does not indicate that Capital One 360 offers hardware token.

Does anyone know if there are any banks in the U.S. that support using physical security keys for two factor authentication?
Capital One 360 does offer a proprietary software token though.

Vanguard requires you to keep your SMS even if you obtain a Yubikey, which means it doesn't add any additional security: the bad guys seek out the weakest link after all. Not sure what Capital One's policies are.

According to the website, First Tech Federal Credit Union and HSBC accept a hardware or software token, but not SMS. Wells Fargo will acccept a hardware token, SMS, or phone call: I don't know whether having a hardware token will permit you to turn off the phone call or SMS.

mptfan
Posts: 6043
Joined: Mon Mar 05, 2007 9:58 am

Re: Best Hub Bank

Post by mptfan » Fri Jun 26, 2020 10:00 pm

CompareContrast wrote:
Fri Jun 26, 2020 7:05 pm
Vanguard requires you to keep your SMS even if you obtain a Yubikey, which means it doesn't add any additional security: the bad guys seek out the weakest link after all.
I agree that having SMS as a backup weakens the security of using a physical security key, but it's not true that it doesn't add any additional security...it does. I used to think that myself, but I became educated about the security benefits of using a security key and I've learned that there is a benefit to using it even if there is an SMS backup.

Nummerkins
Posts: 435
Joined: Tue Jun 01, 2010 4:41 pm

Re: Best Hub Bank

Post by Nummerkins » Sat Jun 27, 2020 9:55 am

ETrade and Schwab have banks and offer physical tokens. I dont know how easy it is to get around though. I dont know of a single bank that offers U2F support though and I wouldn't hold my breath.

As for a hub bank, Ally is the best. Decent rates, no fees, high ACH limits and 1 day transfers once accounts are established.

ChrisBenn
Posts: 322
Joined: Mon Aug 05, 2019 7:56 pm

Re: Best Hub Bank

Post by ChrisBenn » Sat Jun 27, 2020 3:30 pm

CompareContrast wrote:
Fri Jun 26, 2020 7:05 pm
mptfan wrote:
Fri Jun 26, 2020 4:07 pm
CompareContrast wrote:
Fri Jun 26, 2020 3:53 pm
Ok, here's the list of banks offering two factor authentication. As far as I can tell, the only high yield bank offering the "Hardware token" or "Software token" option is Capital One 360. (Corrections welcome.)
I looked at that list and it does not indicate that Capital One 360 offers hardware token.

Does anyone know if there are any banks in the U.S. that support using physical security keys for two factor authentication?
Capital One 360 does offer a proprietary software token though.

Vanguard requires you to keep your SMS even if you obtain a Yubikey, which means it doesn't add any additional security: the bad guys seek out the weakest link after all. Not sure what Capital One's policies are.

(...)
A yubikey @Vanguard does offer additional value even with forced sms fallback; in a phishing scenario (assuming ssl certs weren't compromised) the yubikey would not authenticate to the fake site; you would be presumably prompted for sms fallback, but now have a warning flag of the yubikey not working.

Not perfect, but it does offer additional value still.

Topic Author
CompareContrast
Posts: 48
Joined: Sun Sep 05, 2010 9:08 pm

Re: Best Hub Bank

Post by CompareContrast » Sat Jun 27, 2020 5:11 pm

ChrisBenn wrote:
Sat Jun 27, 2020 3:30 pm
A yubikey @Vanguard does offer additional value even with forced sms fallback; in a phishing scenario (assuming ssl certs weren't compromised) the yubikey would not authenticate to the fake site; you would be presumably prompted for sms fallback, but now have a warning flag of the yubikey not working.

Not perfect, but it does offer additional value still.
Very interesting: thanks. A positive review of the YubiKey is here: https://www.nytimes.com/wirecutter/revi ... rity-keys/ Yubico’s chief engineering officer, Christopher Harrell notes, “People do a lot of campaigns around phishing education and around teaching people to be careful about the URL bar in the browser, but it turns out we’re human. We have other priorities, and our attention is limited.”

It's a fair point. For myself, I tend to lose things and I use a dedicated email for my financial stuff which puts me a little more On Task. So the cost/benefit doesn't work so well for me. It would work for me if Yubikey was accepted by a wider range of financial institutions, especially if at least a few of them permitted an opt-out from SMS texting. If they wanted a backup for the Yubikey, they could choose some other method such as a phone call to Vanguard or a landline voice code.

Nummerkins I see that Schwab offers both hardware and software 2FA solutions. Judging from their instruction page, it's possible that you can opt out of SMS. Not certain though. https://www.schwab.com/help/two-factor-authentication

Schwab Bank doesn't offer high interest rates though, which brings us back to Capital One's proprietary software app (they don't support hardware).

Thanks to everyone for the feedback.

UpperNwGuy
Posts: 3642
Joined: Sun Oct 08, 2017 7:16 pm

Re: Best Hub Bank

Post by UpperNwGuy » Sat Jun 27, 2020 6:05 pm

Navy Federal Credit Union, if you can qualify for membership.

HawkeyePierce
Posts: 1313
Joined: Tue Mar 05, 2019 10:29 pm
Location: Colorado

Re: Best Hub Bank

Post by HawkeyePierce » Sat Jun 27, 2020 6:14 pm

Schwab does not require SMS 2FA, but they also don't support U2F keys. So, still subject to phishing.

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