Charles Schwab Checking + Brokerage Account

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
jb9
Posts: 128
Joined: Thu Feb 24, 2011 4:31 pm

Charles Schwab Checking + Brokerage Account

Postby jb9 » Thu Apr 21, 2016 6:35 pm

Hello,

After a reasonable amount of research, I decided to open a Charles Schwab High Yield Investor Checking Account. Basically, I did it to take advantage of the ATM fee reimbursement benefit. I travel a fair bit and I go to places where I need cash so the prospect of hitting ATMs constantly can add up. One of the things that concerns me about the package is the associated Brokerage Account. They indicated that I don't need to fund it (which I don't plan on currently), but I am curious if they could at some point charge a fee to close the Brokerage Account. I have seen fees to close IRAs and other retirement accounts as well. I funded the account with a money order so I should hopefully get the ATM card soon. Can anyone here offer suggestions as to how to best prepare the account for a successful abroad experience? I will certainly plan on giving them a travel notification (dates and locations). But what about limits? Reducing liability associated with the Brokerage Account? Overdraft protection? Other suggestions or hidden gotchas that I ought to be aware of...

I know everyone has different needs, but I only plan on using the ATM card as an ATM card for withdrawals. I may even set the Debit limit to zero effectively ensuring it is only an ATM card.

Any advice is appreciated. As always, I am grateful for all the helpful advice I have gleaned over the years here and the level of civility folks show -- not actionable but I wanted to say it nonetheless :)

Thanks

Gideont
Posts: 17
Joined: Mon Jan 02, 2012 9:10 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Gideont » Thu Apr 21, 2016 7:27 pm

I've been using their ATM card for several years and have never paid any hidden fees. Every Foreign ATM fee has also been reimbursed. Customer service has been great too when I lost my ATM card.

I don't use the brokerage account and have near received any phone calls from a schwab broker asking me to do business with them.

I highly recommend Schwab to friends and family looking for a convenient ATM card.My daughter also opened an account before going to college and hasn't paid any fees either.

Gideon

sarahjane
Posts: 187
Joined: Tue Jan 21, 2014 5:18 pm

Re: Charles Schwab Checking + Brokerage Account

Postby sarahjane » Thu Apr 21, 2016 7:47 pm

I've used their checking and bill pay services for years with never a transaction in the brokerage account which just sits there unused. No issues with ATM fee reimbursement.

User avatar
triceratop
Moderator
Posts: 2663
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: Charles Schwab Checking + Brokerage Account

Postby triceratop » Thu Apr 21, 2016 7:49 pm

I signed up for exactly this service a few weeks ago. Notice that you get free checks with a $0 balance, which is quite attractive. So if you want to be able to write checks still (may be useful for tax purposes) then it's a nice deal.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Thu Apr 21, 2016 8:07 pm

I've had a checking account with them for two years. I've never used the brokerage account and never had any problems. ATM fee reimbursements come at the end of the month and I've never had a problem.

Before traveling abroad, you can fill out a Debit Card Travel Notice online (under Service > Contact Us). You can also call in to tell them. I did it online before my last trip and had no problem.

I think the standard withdrawal limit is US$500 or the equivalent in a foreign currency. However, you can contact them anytime and have the limit temporarily raised. They told me there is no limit (within reason, I suppose) for how high the temporary limit can be. Since they have no physical branches, they have to make it possible for people to withdraw thousands from an ATM if they need to. I am not sure if you can have the limit permanently raised or what that procedure is.

There is no overdraft protection by default. The non-sufficient funds fee is $25. You can apply for an overdraft credit line (OCL) by phone, after which they will send you an application that you have to sign and mail in. It takes a few days to process it. As far as I know, there is no fee for an overdraft, but you will be charged interest on the negative balance at whatever APR they give you until it's paid off. The ability to get the OCL depends on your credit, as does the limit. I've never had a negative balance, but it seems like very good terms to me. If you go under by a couple hundred and transfer money in to cover it within a few days, the interest will be negligible.

Remember to sign up for mobile check deposit on your phone. It isn't enabled by default and takes a couple days to be approved.

There are only two real gotchas that I am aware of:

1. They won't let you have a spare debit card, so if your card is lost, stolen, eaten by an ATM, etc., you could be in trouble while traveling. However, they will send you a replacement card anywhere in the world, and the delivery can be expedited (possibly for a fee). They also participate in the "Visa 911" service, which apparently means that if you are really in trouble without the card, they can work with a local bank to manufacture a new card for you on the spot.

2. There is no way to deposit cash, so if you sell your computer or stereo on Craigslist and need to deposit $1500 in cash, you will need to find an alternative such as buying a money order, depositing the cash in a different account, wiring the money, etc.

miles monroe
Posts: 1083
Joined: Mon Jan 20, 2014 12:14 pm

Re: Charles Schwab Checking + Brokerage Account

Postby miles monroe » Thu Apr 21, 2016 8:16 pm

the default overdraft protection is they sell stuff in your brokerage account to cover the check. that won't apply to you. i called customer service and turned overdraft protection off cuz thats just a stupid policy to have.

i just got a credit card offer from american express yesterday; 1.5% cash back with the payment going into your schwab brokerage account. i saw the envelope and thot it was gonna be another offer for costco members.

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Thu Apr 21, 2016 8:38 pm

miles monroe wrote:the default overdraft protection is they sell stuff in your brokerage account to cover the check. that won't apply to you. i called customer service and turned overdraft protection off cuz thats just a stupid policy to have.


Yes, that's pretty stupid if so. I thought it was actually margin on the securities -- so, more of a loan with the securities as collateral. But I could be wrong. I have no securities in the brokerage account so haven't really looked into that option.

mcraepat9
Posts: 690
Joined: Thu Jul 16, 2015 11:46 am

Re: Charles Schwab Checking + Brokerage Account

Postby mcraepat9 » Thu Apr 21, 2016 9:27 pm

I use Schwab for my checking and have for most of my tenure left the brokerage account unfunded. My biggest complaint is they will not provide you with an ATM-only card. Only a true debit card. This irritates me to no end, but because their overall package is still top notch and better than all other checking accounts I've seen, I've stuck with Schwab.

However, I do find the brokerage account quite helpful on occasion, particularly with rebalancing and TLH. Transfers between checking account and brokerage are instantaneous and can be used to purchase a pretty decent suite of commission free ETFs (including the standard Schwab low-cost index ETFs as well as popular small-cap value ETFs such as SLYV and RZV). Had I not already had my investments with Vanguard, I probably would have done my investing with Schwab via their brokerage account tied to my HY investor checking.

David Scubadiver
Posts: 237
Joined: Thu Mar 24, 2016 8:40 am

Re: Charles Schwab Checking + Brokerage Account

Postby David Scubadiver » Fri Apr 22, 2016 6:56 am

Some observations for what they are worth.

I have free checking/ATM privileges with Schwab and E*Trade. I do all of my check writing off of the brokerage account solely because overdraft comes from margin so if I make a mistake it costs next to nothing. That is at E*Trade. I would be shocked if it were not the case at Schwab as well.

There has only been one time when I used the debit card, however. When my wallet was stolen and I lost my First Arkansas Bank & Trust debit card and was waiting for a replacement.

It isn't for everyone but if you don't mind using a debit card 10x a month and don't mind arranging for a monthly direct deposit/electronic transfer, you earn 1.5% on up to $15,000 and get worldwide arm refunds up to $25 per month. For me, it is the card of choice.

For those who want an ATM card only, why is that? Why limit your flexibility? If your credit card is lost or declined, it is nice to be able to use a debit card in a pinch. Sure, if it is stolen (like mine was) someone can go on a spending spree (as they did with mine) but that can happen with a credit card as well. It is easy enough to take care of.

mcraepat9
Posts: 690
Joined: Thu Jul 16, 2015 11:46 am

Re: Charles Schwab Checking + Brokerage Account

Postby mcraepat9 » Fri Apr 22, 2016 8:59 am

David Scubadiver wrote:For those who want an ATM card only, why is that? Why limit your flexibility? If your credit card is lost or declined, it is nice to be able to use a debit card in a pinch. Sure, if it is stolen (like mine was) someone can go on a spending spree (as they did with mine) but that can happen with a credit card as well. It is easy enough to take care of.


1- The legal framework for consumer protection against bad actions (fraudulent use, issues with merchants, resolution of disputes) with respect to credit cards (TILA, Regulation Z) is materially more favorable to consumers than for debit cards (EFTA, Regulation E). It isn't even really close.

2- If someone does in fact steal my debit card, they can literally take money out of my bank account and I have to handle with my bank restoring those funds. With credit cards, I simply do not pay fraudulent charges. I will always be the one gets to determine how money leaves my checking account, period.

I have enough credit cards that it's not likely I'll lose (or be declined by) all of them at a point when all I have is a debit card. In my opinion, unless someone is offering a discount for using debit, there is no good non-behavioral reason to use a debit card instead of a credit card. Even if a merchant does offer such a discount, the same discount is likely also available for cash.

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Fri Apr 22, 2016 10:17 am

David Scubadiver wrote:For those who want an ATM card only, why is that? Why limit your flexibility? If your credit card is lost or declined, it is nice to be able to use a debit card in a pinch. Sure, if it is stolen (like mine was) someone can go on a spending spree (as they did with mine) but that can happen with a credit card as well. It is easy enough to take care of.

Read this thread...

viewtopic.php?t=185110
I eat risk for breakfast. :)

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Fri Apr 22, 2016 10:21 am

mcraepat9 wrote:I use Schwab for my checking and have for most of my tenure left the brokerage account unfunded. My biggest complaint is they will not provide you with an ATM-only card. Only a true debit card. This irritates me to no end, but because their overall package is still top notch and better than all other checking accounts I've seen, I've stuck with Schwab.

I have been using Schwab Bank for a couple of months now, and I really like it, and I highly recommend it. Take a look at this thread...

viewtopic.php?t=186427

Like you, I also wanted an ATM only card because I do not want my debit card linked to the Visa payment system, so I called Schwab and they were very helpful (their customer service is U.S. based and top notch) and were able to set my POS (point of sale) or daily purchase limit to $.01. Effectively this means that I was able to turn my Visa debit card into an ATM only card because no debit purchase transactions will be approved that are greater than one penny. For clarification, the debit card has two daily limits...a daily cash withdrawal limit, and a daily purchase limit, and Schwab can change them independently.

I will add one tip that the Schwab Bank customer service rep told me of which I was unaware... she said you can get a cash advance from the debit card by going inside a bank and using a teller, as opposed to going to the ATM. The benefit to getting cash this way is 1) you avoid the ATM transaction limit (which is usually $300 - $500 depending on the ATM) so in cases where you need more cash this is helpful, and 2) you can get whatever combination of denomination bills you want, whereas most ATMs only give you $20 bills, and 3) you do not have to pay an ATM fee.

Regarding number 3, let me be clear that the bank from which you draw money is still charging a fee through the visa cash advance system, and that fee is being paid by Schwab to the bank as a fee for using them to advance cash to you, but the difference is you as the customer do not see the fee and do not pay the fee, it is being paid behind the scenes between Schwab and the bank. This is different from the situation where you use the ATM and you do have to pay a fee (usually $2 or $2.50) and then you get an entry on your statement for $302.00 when you withdrwaw $300 from an ATM, and then at the end of the month you get a $2 credit from Schwab for the fee. The benefit to using the card as a cash advance is for spreadsheet nerds like me, when you get a cash advance, you only see a $300 transaction on your statement and it is much cleaner from a bookkeeping perspective and there is no need to account for the $2 with another transaction to balance out your records.

The Schwab rep also said that it should be free to go inside and use a teller to get a cash advance at domestic banks, but if you go to a bank outside the U.S. they might charge a fee to do this, so it may be better in that situation to use the ATM.
Last edited by mptfan on Fri Apr 22, 2016 12:41 pm, edited 10 times in total.
I eat risk for breakfast. :)

mcraepat9
Posts: 690
Joined: Thu Jul 16, 2015 11:46 am

Re: Charles Schwab Checking + Brokerage Account

Postby mcraepat9 » Fri Apr 22, 2016 10:32 am

mptfan wrote:
mcraepat9 wrote:I use Schwab for my checking and have for most of my tenure left the brokerage account unfunded. My biggest complaint is they will not provide you with an ATM-only card. Only a true debit card. This irritates me to no end, but because their overall package is still top notch and better than all other checking accounts I've seen, I've stuck with Schwab.

I have been using Schwab Bank for a couple of months now, and I really like it, and I highly recommend it. Like you, I also wanted an ATM only card because I do not want my debit card linked to the Visa payment system, so I called Schwab and they were very helpful (their customer service is U.S. based and top notch) and were able to set my POS (point of sale) transaction limit to $.01. Effectively this means that I was able to turn my Visa debit card into an ATM only card because no debit transactions will be approved that are greater than one penny.


Wow, this is impressive. I will have to try this. When I opened my Schwab HY investor checking account in 2009, my request for an ATM-only card was (politely) rebuffed. Thanks for this!

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Fri Apr 22, 2016 10:41 am

mcraepat9 wrote:
mptfan wrote:
mcraepat9 wrote:I use Schwab for my checking and have for most of my tenure left the brokerage account unfunded. My biggest complaint is they will not provide you with an ATM-only card. Only a true debit card. This irritates me to no end, but because their overall package is still top notch and better than all other checking accounts I've seen, I've stuck with Schwab.

I have been using Schwab Bank for a couple of months now, and I really like it, and I highly recommend it. Like you, I also wanted an ATM only card because I do not want my debit card linked to the Visa payment system, so I called Schwab and they were very helpful (their customer service is U.S. based and top notch) and were able to set my POS (point of sale) transaction limit to $.01. Effectively this means that I was able to turn my Visa debit card into an ATM only card because no debit transactions will be approved that are greater than one penny.


Wow, this is impressive. I will have to try this. When I opened my Schwab HY investor checking account in 2009, my request for an ATM-only card was (politely) rebuffed. Thanks for this!

You're welcome. I went back and checked my notes and I think the Schwab rep told me that she "set the daily limit for purchases" with the debit card to .01. For clarification, I think there are two daily limits on the debit card... a daily limit for cash withdrawals, and a daily limit for purchases.

Just out of curiosity, why did you say it was impressive?
I eat risk for breakfast. :)

JGoneRiding
Posts: 687
Joined: Tue Jul 15, 2014 3:26 pm

Re: Charles Schwab Checking + Brokerage Account

Postby JGoneRiding » Fri Apr 22, 2016 10:47 am

I love C.sch been with them since I was 18 my brokerage acct actually came first as a pass through for my grandmother to distribute funds for me to pay for college. I do use it and have no issues. The checking I should ise more. If interest rates ever go up that checking pays well at one point I was getting 4% on it:)
I do a lot of my autopay stuff through them never any issues and wi th brokerage there is someone in the us available all the time

In cash deposit issue. I have mine linked to another acct and do transfers. But now that bank isn't local any more so I am opening another acct!

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Fri Apr 22, 2016 11:32 am

mcraepat9 wrote:In my opinion, unless someone is offering a discount for using debit, there is no good non-behavioral reason to use a debit card instead of a credit card. Even if a merchant does offer such a discount, the same discount is likely also available for cash.


Pretty much the only time I use debit is to get gas from Arco stations. Their gas is generally the cheapest and they don't take credit cards. Cash is certainly an option though, at least during normal hours.

mcraepat9
Posts: 690
Joined: Thu Jul 16, 2015 11:46 am

Re: Charles Schwab Checking + Brokerage Account

Postby mcraepat9 » Fri Apr 22, 2016 1:08 pm

mptfan wrote:
mcraepat9 wrote:
mptfan wrote:
mcraepat9 wrote:I use Schwab for my checking and have for most of my tenure left the brokerage account unfunded. My biggest complaint is they will not provide you with an ATM-only card. Only a true debit card. This irritates me to no end, but because their overall package is still top notch and better than all other checking accounts I've seen, I've stuck with Schwab.

I have been using Schwab Bank for a couple of months now, and I really like it, and I highly recommend it. Like you, I also wanted an ATM only card because I do not want my debit card linked to the Visa payment system, so I called Schwab and they were very helpful (their customer service is U.S. based and top notch) and were able to set my POS (point of sale) transaction limit to $.01. Effectively this means that I was able to turn my Visa debit card into an ATM only card because no debit transactions will be approved that are greater than one penny.


Wow, this is impressive. I will have to try this. When I opened my Schwab HY investor checking account in 2009, my request for an ATM-only card was (politely) rebuffed. Thanks for this!

You're welcome. I went back and checked my notes and I think the Schwab rep told me that she "set the daily limit for purchases" with the debit card to .01. For clarification, I think there are two daily limits on the debit card... a daily limit for cash withdrawals, and a daily limit for purchases.

Just out of curiosity, why did you say it was impressive?


I've had this gripe for so long that I never really pursued alternative means for accomplishing the same end, which is avoiding hassle with theft of my debit card. I called in 2009, Schwab said debit card only, I gave up. It just never occurred to me to pursue this option, though now reading what you wrote it makes sense.

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Fri Apr 22, 2016 1:16 pm

mcraepat9 wrote:I've had this gripe for so long that I never really pursued alternative means for accomplishing the same end, which is avoiding hassle with theft of my debit card. I called in 2009, Schwab said debit card only, I gave up. It just never occurred to me to pursue this option, though now reading what you wrote it makes sense.

Let me know if you call Schwab and are able to make that change. My experience with their customer service has been very positive, I just want to know how it is for others, and I'm sure other people reading this will want to confirm whether that option is available to them.
I eat risk for breakfast. :)

User avatar
powermega
Posts: 1116
Joined: Fri May 16, 2014 12:07 am
Location: Colorado

Re: Charles Schwab Checking + Brokerage Account

Postby powermega » Fri Apr 22, 2016 3:14 pm

We have checking, savings, taxable brokerage and our personal Roth IRAs at Schwab. I've been very happy with their banking. Customer service is world class.
Even a stopped clock is right twice a day.

thepommel
Posts: 364
Joined: Sun Jul 15, 2007 6:59 pm

Re: Charles Schwab Checking + Brokerage Account

Postby thepommel » Fri Apr 22, 2016 10:23 pm

jb9 wrote:Hello,

After a reasonable amount of research, I decided to open a Charles Schwab High Yield Investor Checking Account. Basically, I did it to take advantage of the ATM fee reimbursement benefit. I travel a fair bit and I go to places where I need cash so the prospect of hitting ATMs constantly can add up. One of the things that concerns me about the package is the associated Brokerage Account. They indicated that I don't need to fund it (which I don't plan on currently), but I am curious if they could at some point charge a fee to close the Brokerage Account. I have seen fees to close IRAs and other retirement accounts as well. I funded the account with a money order so I should hopefully get the ATM card soon. Can anyone here offer suggestions as to how to best prepare the account for a successful abroad experience? I will certainly plan on giving them a travel notification (dates and locations). But what about limits? Reducing liability associated with the Brokerage Account? Overdraft protection? Other suggestions or hidden gotchas that I ought to be aware of...

I know everyone has different needs, but I only plan on using the ATM card as an ATM card for withdrawals. I may even set the Debit limit to zero effectively ensuring it is only an ATM card.

Any advice is appreciated. As always, I am grateful for all the helpful advice I have gleaned over the years here and the level of civility folks show -- not actionable but I wanted to say it nonetheless :)

Thanks


Keep in mind that you can simply open up a Schwab One brokerage account and enable the cash management features. These features include a debit card, free checks, and bill pay. When you "link" a Schwab One brokerage account to a Schwab Checking account, they automatically disable the cash management features of the Schwab One brokerage account. I guess the assumption is that any cash feature should be used in the checking account, if the two are "linked".

Kind Regards,

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Sat Apr 23, 2016 2:14 pm

powermega wrote:We have checking, savings, taxable brokerage and our personal Roth IRAs at Schwab. I've been very happy with their banking. Customer service is world class.


There's a fair number of people who really like the Schwab experience and service both on the banking and brokerage side. In fact, numerous Vanguard fans have moved out or are contemplating moving out of Vanguard or splitting between Vanguard and another brokerage firm due to better customer service.

Example of one of many threads where customers feel that the Vanguard experience has been deteriorating.....
http://socialize.morningstar.com/NewSocialize/forums/p/358840/3729883.aspx#3729883

Make no mistake - I think Vanguard is a great Mutual Fund & ETF company and their Funds + ETFs are great - however, compared to other competitors as an account holder directly at Vanguard for mutual fund and brokerage account investing, the service feels a bit lacking comparatively speaking including everything from cost-basis tracking, tax forms, customer service speed and website experience, etc.

But these days - with so many super low cost ETF choices from iShares, Schwab, SPDRs and of course Vanguard --- you're free to choose the best brokerage firm to work with. Many are choosing to go with Schwab, Fidelity and TD Ameritrade as examples and you can easily hold your favorite ETFs from these brokerages.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Sat Apr 23, 2016 3:27 pm

To add to what I just said - the fact that a Schwab Brokerage account is opened with $0 minimum when you open it together with their Checking account is a great option for younger folks to start investing and who are starting out small.

And of course - you have the option of not using the Brokerage account if you don't want to.

By the way - I believe that when the Checking account is tied to the Brokerage account for overdraft - I believe this is only for the Sweep (Cash) Account held in the Brokerage account. So it's not as if you're short of cash in your Checking account and the overdraft system will sell stocks/etfs/funds in your Brokerage account to cover it.

So the Checking account only uses the Brokerage sweep (cash) account as the overdraft --- but again this is an option that can be turned off and on.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

User avatar
RyeWhiskey
Posts: 858
Joined: Thu Jan 12, 2012 10:04 pm

Re: Charles Schwab Checking + Brokerage Account

Postby RyeWhiskey » Sat Apr 23, 2016 3:31 pm

I have had a Schwab Checking+Brokerage account for over five years. I use it as my national/international bank as I bank with a local credit union for my immediate needs and use Vanguard for investments. I have never had an issue with their service or anything, with the sole exception--that was mentioned earlier--that you cannot deposit cash. :beer
This post was brought to you by Vanguard Total World Stock Index (VTWSX/VT).

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Sat Apr 23, 2016 4:19 pm

Schwab, Fidelity, and TD Ameritrade all seem like perfectly reasonable places to do ETF trading. However, I guess I am just more comfortable with the fact that Vanguard has been in the business of low-cost index funds for years. It's one of the only things they do, and they do it well. So I still prefer Vanguard. I've also had excellent customer service from both Vanguard and Schwab, so I haven't noticed a difference there.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Sat Apr 23, 2016 5:11 pm

Dave81 wrote:Schwab, Fidelity, and TD Ameritrade all seem like perfectly reasonable places to do ETF trading. However, I guess I am just more comfortable with the fact that Vanguard has been in the business of low-cost index funds for years. It's one of the only things they do, and they do it well. So I still prefer Vanguard. I've also had excellent customer service from both Vanguard and Schwab, so I haven't noticed a difference there.


Right - but you can buy the actual Vanguard low-cost index ETFs from any brokerage firm. In fact, TD Ameritrade has a list of Vanguard ETFs that have no transaction fees on their platform. iShares and SPDRs have offered ETFs for a long time as well.

For example - the iShares S&P Midcap 400 ETF has a hefty $27B in assets - and has been available for over 15 years.

You can choose your favorite 'supermarket' to buy the products you want. Rick Ferri has alluded to this similar thought as well - he can choose the best fit ETF for customers - he also seems to tend to favor IJS (iShares S&P 600 Smallcap Value) for SCV based on the articles I've seen from him. Rick isn't so fond of the Vanguard platform but has no problem and can easily have his customers buy any Vanguard ETFs where needed on the brokerage platforms he and his firm favors.

Again someone wrote the following below in another forum post - just one of many. And again, this is not a knock against Vanguard's Mutual Fund/ETF *products* but their account-management-services for direct account holders.

I thought I should close the loop here...

My minor daughter wanted to open a ROTH IRA. For both Vanguard and TD Ameritrade I have to submit paper forms and can not open the account online. For TDA I was able to call and get the forms, fill them out and send themin, and receive the welcome kit in the mail with the information needed to open the online account.

I was never able to talk to anyone at Vanguard (they must be busy when I am not busy) and so I took the advice posted here to contact them via the secure message center. I was adding ETFs to my daugher's IRA at TDA before Vanguard was able to post the forms to my secure message box on their site. Again, I am also a Voyager Select customer -- which means I am supposed to get better service than the average investor.

Today I just completed the forms necessary to move all of my investments from Vanguard to TDA. I will continue to use Vanguard investment products, but with a firm that understands customer service.

I think Vanguard is becoming the Walmart of the investment firms. Low prices sometimes burden both customers and employees.

Again, no offense to any Vanguard fans. I was a customer for 25 years, but they are not the firm they once were. Fortunately, thanks to all the competition we have many choices and everyone can select the firm that best matches their situation. Perhaps Vanguard should exit the account servicing business (similar to DFA) and just focus on investment products and wholesale them to discount brokers and advisors.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Sat Apr 23, 2016 5:45 pm

Kenster1 wrote:Again someone wrote the following below in another forum post - just one of many. And again, this is not a knock against Vanguard's Mutual Fund/ETF *products* but their account-management-services for direct account holders.


All I can say is that does not remotely conform to my experience with Vanguard. I have called them many times over the last two years and they have always answered the phone quickly and been very helpful. They must have spent an hour with me on the phone a few weeks ago to initiate the process of transferring my mother's two annuities from Prudential to Vanguard.

It is true that Vanguard is not available 24/7 like Schwab. Also, possibly more forms have to be physically signed and mailed in with Vanguard than elsewhere (not sure). On the other hand, Vanguard was willing to open a "frozen" SIMPLE IRA for me (to which I can transfer contributions through my employer and invest them how I want) and Schwab was not.

Sure, others have been in the ETF business for a while, and I have no reason to think there is anything wrong with iShares, for example. I looked into their ETFs a couple years ago and they seemed fine. Vanguard has good offerings as well, but if I was interested in trading ETFs then I might shop around more. Personally, I prefer to just automatically invest a certain amount per month into the mutual fund(s) of my choice and not have to think about it or trade during market hours. I don't think I can trade ETFs in my SIMPLE IRA anyway. I could in my Roth IRA but don't really see the point when mutual funds are simpler for my purposes.

EddyB
Posts: 236
Joined: Fri May 24, 2013 3:43 pm

Re: Charles Schwab Checking + Brokerage Account

Postby EddyB » Mon Apr 25, 2016 11:47 am

Dave81 wrote:
miles monroe wrote:the default overdraft protection is they sell stuff in your brokerage account to cover the check. that won't apply to you. i called customer service and turned overdraft protection off cuz thats just a stupid policy to have.


Yes, that's pretty stupid if so. I thought it was actually margin on the securities -- so, more of a loan with the securities as collateral. But I could be wrong. I have no securities in the brokerage account so haven't really looked into that option.


Coincidentally, I called Schwab last week to ask about how overdraft would be funded. At least to me, CS confirmed, after speaking with a supervisor, that overdraft would be funded by a margin loan against the securities in my brokerage account.

miles monroe
Posts: 1083
Joined: Mon Jan 20, 2014 12:14 pm

Re: Charles Schwab Checking + Brokerage Account

Postby miles monroe » Mon Apr 25, 2016 12:02 pm

EddyB wrote:
Dave81 wrote:
miles monroe wrote:the default overdraft protection is they sell stuff in your brokerage account to cover the check. that won't apply to you. i called customer service and turned overdraft protection off cuz thats just a stupid policy to have.


Yes, that's pretty stupid if so. I thought it was actually margin on the securities -- so, more of a loan with the securities as collateral. But I could be wrong. I have no securities in the brokerage account so haven't really looked into that option.


Coincidentally, I called Schwab last week to ask about how overdraft would be funded. At least to me, CS confirmed, after speaking with a supervisor, that overdraft would be funded by a margin loan against the securities in my brokerage account.


thats not what i was told 2 years ago, but maybe things have changed or maybe i got bad info. i hope what you say is true. this is such an important issue that i am going to follow up again. what about people who have not set up margin on their accounts?

having had my account info stolen, and checks being written using my routing information, this is a big deal to deal.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Tue Apr 26, 2016 6:08 pm

Note also that the Schwab Checking account does not allow for international wires going out nor does it accept international incoming wires.

So you'll have to use your local bank or another bank account for that - in case that ever occurs.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Tue Apr 26, 2016 6:13 pm

Kenster1 wrote:Note also that the Schwab Checking account does not allow for international wires going out nor does it accept international incoming wires.

So you'll have to use your local bank or another bank account for that - in case that ever occurs.


The associated brokerage account, however, apparently does.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Tue Apr 26, 2016 6:25 pm

Yes the Checking account taps into the cash on the Brokerage side for overdraft protection and can potentially tap into the Margin if you have that - but that feature can be turned off.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

OakPhilliesFan
Posts: 232
Joined: Mon Apr 13, 2015 8:50 pm
Location: Oakland, CA

Re: Charles Schwab Checking + Brokerage Account

Postby OakPhilliesFan » Tue Apr 26, 2016 6:28 pm

Kenster1 wrote:Yes the Checking account taps into the cash on the Brokerage side for overdraft protection and can potentially tap into the Margin if you have that - but that feature can be turned off.


I was talking about international wires. You can wire money to the brokerage account and transfer it to checking, or transfer from checking into brokerage and then wire it out.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Tue Apr 26, 2016 6:41 pm

Dave81 wrote:
Kenster1 wrote:Yes the Checking account taps into the cash on the Brokerage side for overdraft protection and can potentially tap into the Margin if you have that - but that feature can be turned off.


I was talking about international wires. You can wire money to the brokerage account and transfer it to checking, or transfer from checking into brokerage and then wire it out.


Sorry, I wasn't responding to that - but to the prior responses about overdraft protection, margin accounts, etc.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Thu Apr 28, 2016 11:07 am

Does Schwab allow you to easily open a 2nd checking account like some of the other online banks?
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

scornovaca
Posts: 13
Joined: Thu Jan 03, 2008 11:44 am

Re: Charles Schwab Checking + Brokerage Account

Postby scornovaca » Thu Apr 28, 2016 5:38 pm

Kenster1 wrote:Does Schwab allow you to easily open a 2nd checking account like some of the other online banks?


For what it's worth, I have a single and joint account with Schwab Bank, the second account just required paperwork.

One note, however, is that Bill Pay is not linked to a single account, it is linked to you singly -- you can configure it to take money from either bank account.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Thu Apr 28, 2016 6:35 pm

scornovaca wrote:
Kenster1 wrote:Does Schwab allow you to easily open a 2nd checking account like some of the other online banks?


For what it's worth, I have a single and joint account with Schwab Bank, the second account just required paperwork.

One note, however, is that Bill Pay is not linked to a single account, it is linked to you singly -- you can configure it to take money from either bank account.


Thanks - and so under your login, you can see your 2 Schwab Checking accounts correct? Now when you opened your 2nd Checking account, did it automatically open a 2nd Brokerage account tied to that 2nd Checking account? I guess if it does then it's still no big deal - you can leave the 2nd Brokerage account dormant and just use the 1st Brokerage account where needed.

Schwab might want to change the name of their "Hi-Yield" Checking account. :)
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

scornovaca
Posts: 13
Joined: Thu Jan 03, 2008 11:44 am

Re: Charles Schwab Checking + Brokerage Account

Postby scornovaca » Fri Apr 29, 2016 7:59 am

Kenster1 wrote:
scornovaca wrote:
Kenster1 wrote:Does Schwab allow you to easily open a 2nd checking account like some of the other online banks?


For what it's worth, I have a single and joint account with Schwab Bank, the second account just required paperwork.

One note, however, is that Bill Pay is not linked to a single account, it is linked to you singly -- you can configure it to take money from either bank account.


Thanks - and so under your login, you can see your 2 Schwab Checking accounts correct? Now when you opened your 2nd Checking account, did it automatically open a 2nd Brokerage account tied to that 2nd Checking account? I guess if it does then it's still no big deal - you can leave the 2nd Brokerage account dormant and just use the 1st Brokerage account where needed.

Schwab might want to change the name of their "Hi-Yield" Checking account. :)


Correct, there's a taxable brokerage account for myself as well as one for the joint participants. I can't speak for two individual accounts but I imagine they wouldn't prevent it.

mcraepat9
Posts: 690
Joined: Thu Jul 16, 2015 11:46 am

Re: Charles Schwab Checking + Brokerage Account

Postby mcraepat9 » Sat Jul 16, 2016 1:27 pm

mptfan wrote:
mcraepat9 wrote:I've had this gripe for so long that I never really pursued alternative means for accomplishing the same end, which is avoiding hassle with theft of my debit card. I called in 2009, Schwab said debit card only, I gave up. It just never occurred to me to pursue this option, though now reading what you wrote it makes sense.

Let me know if you call Schwab and are able to make that change. My experience with their customer service has been very positive, I just want to know how it is for others, and I'm sure other people reading this will want to confirm whether that option is available to them.


Sorry to revive a zombie thread, but I did confirm this week that this approach does work (i.e. by setting POS limit to $0.01, you can effectively turn off the POS feature of your Schwab debit card and make it ATM-only).

User avatar
4nursebee
Posts: 860
Joined: Sun Apr 01, 2012 7:56 am
Location: US

Re: Charles Schwab Checking + Brokerage Account

Postby 4nursebee » Sun Jul 17, 2016 5:07 am

Thanks for the revival of this thread, good stuff to know.

Does Fido or VG offer anything comparable?
4nursebee

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Sun Jul 17, 2016 8:30 am

4nursebee wrote:Thanks for the revival of this thread, good stuff to know.

Does Fido or VG offer anything comparable?

Fidelity does - it's called their Cash Management Account (CMA).

Fidelity doesn't have a banking arm - so the CMA is an FDIC-insured account not by Fidelity because Fidelity sweeps the money daily into a number of partner FDIC-insured banks.
But it's all transparent to the user.

Plus Fidelity also has the 2% Cash Back Visa which some users use in conjunction with the Fido CMA.

Threads about it:
https://www.bogleheads.org/forum/viewtopic.php?t=137384

https://www.bogleheads.org/forum/viewtopic.php?t=181377
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

radiowave
Posts: 1119
Joined: Thu Apr 30, 2015 5:01 pm

Re: Charles Schwab Checking + Brokerage Account

Postby radiowave » Sun Jul 17, 2016 8:38 am

4nursebee wrote:Thanks for the revival of this thread, good stuff to know.

Does Fido or VG offer anything comparable?


Fidelity does not allow you to change the daily withdrawal limits for purchases, it can only be increased not decreased. I went around twice on the phone with Fidelity thinking that was very odd. But is has to do with NY Mellon bank (not sure if I got that exactly right) and not Fidelity. A work around is to set up a second cash management account at Fidelity and just transfer what cash you want to pull out by the card so you don't expose your full brokerage account to the card. Schwab seems to have a better approach. Note: Bank of America still has an ATM only card (actually there is a white strip that says this right on the card).

User avatar
wander
Posts: 2200
Joined: Sat Oct 04, 2008 9:10 am

Re: Charles Schwab Checking + Brokerage Account

Postby wander » Sun Jul 17, 2016 11:00 am

I have been with Charles Schwab (checking and brokerage accounts) since it first came out, and never had any problem. I withdrew cash at ATMs anywhere in the world no charge. Their brokerage account is good too.

User avatar
Kenster1
Posts: 3181
Joined: Wed Feb 28, 2007 10:50 pm

Re: Charles Schwab Checking + Brokerage Account

Postby Kenster1 » Sun Jul 17, 2016 6:14 pm

radiowave wrote:Fidelity does not allow you to change the daily withdrawal limits for purchases, it can only be increased not decreased. I went around twice on the phone with Fidelity thinking that was very odd. But is has to do with NY Mellon bank (not sure if I got that exactly right) and not Fidelity. A work around is to set up a second cash management account at Fidelity and just transfer what cash you want to pull out by the card so you don't expose your full brokerage account to the card. Schwab seems to have a better approach. Note: Bank of America still has an ATM only card (actually there is a white strip that says this right on the card).

Fidelity allows you to have 2 CMA's and tie it to 1 brokerage account if you wish - or you don't have to connect your CMA to your brokerage account if you do not wish to.

With Schwab - if you open a 2nd Checking Account - it automatically opens and ties it to a 2nd Brokerage account - you can't tie 2 Checking accounts to your 1 Brokerage account.

With Fidelity CMA - they cover some overdrafts at their discretion like Banks do - but Fidelity doesn't charge any overdraft fees.
Last edited by Kenster1 on Mon Jul 18, 2016 8:57 am, edited 2 times in total.
SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

User avatar
G-Force
Posts: 262
Joined: Sun Sep 20, 2009 3:03 pm
Location: Florida
Contact:

Re: Charles Schwab Checking + Brokerage Account

Postby G-Force » Sun Jul 17, 2016 8:48 pm

4nursebee wrote:Thanks for the revival of this thread, good stuff to know.

Does Fido or VG offer anything comparable?

Vanguard offers the Advantage account, but you need 1M in assets to get it free, otherwise there is a monthly fee for the account and another fee for billpay.

User avatar
4nursebee
Posts: 860
Joined: Sun Apr 01, 2012 7:56 am
Location: US

Re: Charles Schwab Checking + Brokerage Account

Postby 4nursebee » Mon Jul 18, 2016 2:50 am

VG still has fees for ATM unless it is affiliated with PNC.
$5 a month electronic bill payment.
4nursebee

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Mon Jul 18, 2016 4:19 pm

thepommel wrote:Keep in mind that you can simply open up a Schwab One brokerage account and enable the cash management features. These features include a debit card, free checks, and bill pay.

Thank you for pointing this out. My views on banking and cash management has evolved recently...

Not long ago I questioned if I really needed a brick and mortar bank or credit union, and I switched to using Schwab online bank, and I have been very happy so far.

Now, my views are evolving even more as it seems to me that the differences between a "checking" account and a "brokerage" account from the standpoint of using them as cash management accounts are few and fading away. I am starting to wonder if a "checking" account is really necessary at all as separate from a brokerage account with cash management features. Why not just use a brokerage account with cash management features? What is the point of transferring money back and forth between a brokerage account and a checking account if the brokerage account has the same cash management features of the checking account?
Last edited by mptfan on Mon Jul 18, 2016 4:23 pm, edited 1 time in total.
I eat risk for breakfast. :)

User avatar
RyeWhiskey
Posts: 858
Joined: Thu Jan 12, 2012 10:04 pm

Re: Charles Schwab Checking + Brokerage Account

Postby RyeWhiskey » Mon Jul 18, 2016 4:22 pm

mptfan wrote:
thepommel wrote:Keep in mind that you can simply open up a Schwab One brokerage account and enable the cash management features. These features include a debit card, free checks, and bill pay.

Thank you for pointing this out. It seems to me that the differences between a "checking" account and a "brokerage" account from the standpoint of using them as cash management accounts are fading away. I am starting to wonder if a "checking" account is really necessary at all as separate from a brokerage account with cash management features. Why not just use a brokerage account with cash management features?


I'm not sure if you can transfer funds from a credit union (or bank) checking account into a brokerage account, but you can into a checking account. So there may be limitations regarding transfers that can be of great importance in certain situations. That aside, the cash management features of the brokerage account are nearly identical it seems.
This post was brought to you by Vanguard Total World Stock Index (VTWSX/VT).

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Mon Jul 18, 2016 4:25 pm

RyeWhiskey wrote:I'm not sure if you can transfer funds from a credit union (or bank) checking account into a brokerage account...

I think that you can. I have not transferred from my credit union directly to my brokerage account, but I have transferred funds from my Schwab brokerage account directly to my credit union checking account. The brokerage account and the checking account are connected to the same ACH system, so I don't see why a transfer in the other direction would not also work.
I eat risk for breakfast. :)

User avatar
RyeWhiskey
Posts: 858
Joined: Thu Jan 12, 2012 10:04 pm

Re: Charles Schwab Checking + Brokerage Account

Postby RyeWhiskey » Mon Jul 18, 2016 4:26 pm

mptfan wrote:
RyeWhiskey wrote:I'm not sure if you can transfer funds from a credit union (or bank) checking account into a brokerage account...

Yes, you can. I have transferred funds from my Schwab brokerage account directly to my credit union checking account. The brokerage account and the checking account are connected to the same ACH system.


I'm aware that you can do so from Schwab; I'm saying the inverse: moving cash from a credit union checking account INTO Schwab brokerage.
This post was brought to you by Vanguard Total World Stock Index (VTWSX/VT).

mptfan
Posts: 3971
Joined: Mon Mar 05, 2007 9:58 am

Re: Charles Schwab Checking + Brokerage Account

Postby mptfan » Mon Jul 18, 2016 4:27 pm

RyeWhiskey wrote:I'm aware that you can do so from Schwab; I'm saying the inverse: moving cash from a credit union checking account INTO Schwab brokerage.

I edited my post to clarify that I have not done the inverse.
I eat risk for breakfast. :)


Return to “Personal Finance (Not Investing)”

Who is online

Users browsing this forum: basspond, mhalley, niceguy7376, Yahoo [Bot] and 59 guests