Any benefit to linking your Brokerage account to your Local Bank account?

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lgb
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Any benefit to linking your Brokerage account to your Local Bank account?

Post by lgb »

I had setup a Brokerage account with one of the large places, and we linked our local bank account to it as part of setting that up, and I noticed today that our local bank account has an option to link a 3rd party account to it, one of the options being a Brokerage account. With one of the options being the large place we have this brokerage account with, presumably if we submit the required details of the Brokerage account.

Since the money in the brokerage account is basically in a Money Market Fund at least presently -.... are there some reasons we would want to also have our Local Bank login have access to the Brokerage account?

Does it help facilitate moving things both directions - where maybe originally with the Brokerage account having details of our local bank that provided one thing, but if we did the same with our local bank account and connected the Brokerage account to it, it provides something else I'm not thinking of that is a positive?

Sorry - just not used to having an investment account that isn't a 'retirement' account that is typically untouched/unavailable...

Trying to understand how others use this ability to have things linked up...

I also see you can Wire funds, or do an EFT (Electronic Funds Transfer) ....do most people do EFT's?

Trying to learn a bit from others.
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TomatoTomahto
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by TomatoTomahto »

We have a local bank account because we like to support local businesses. Our significant funds and transfers take place at BoA and Fidelity.

One time I noticed that a mobile deposit did not go through at our local bank and they couldn’t find a record of it anywhere. Now I only deposit checks into an ATM with a receipt. They’re a small bank for a reason.
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123
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by 123 »

With bank and brokerage accounts you can usually push or pull funds from either side. Often each "side" may have different transaction money amounts limits (daily but also maybe weeky or monthly) so that can make it more practical to use one side or the other. From my perspective I generally link to the bank account from the brokerage account. Our brokerage accounts have larger balences. I don't want to allow a compartively small bank account the ability to drain our brokerage account if the bank onlne access gets hacked.

While most money transfer operations allow you to use ACH without additional confirmation if you request a wire you may have to do an additinal authentication step (or call-in). The reason is that when you do a "wire" to transfer funds the money is instantly gone and generally cannot be recalled or recovered. ACH involves a couple of cycles so it often takes a couple of days for funds to arrive.
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lgb
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by lgb »

ACH is or is like a EFT (Electronics Funds Transfer) yes? ...and takes a couple/few days and may not incur a fee depending upon your local bank or if the other direction the investment custodian?

It seems like there could be benefit to having both the local bank and the investment custodian to each similarly have the Brokerage account and Local Bank account connected.

Just trying to convince my spouse with solid reasons to connect the Local Bank with the Brokerage account, they seemed to think connecting the Brokerage account with the local bank made sense when we opened up the Brokerage account, but when I suggested we could do the same with the local bank referencing the Brokerage account I got some concerns. My thought was it would make sense to move excess cash in the local Bank account over to the Brokerage account and there was concern about doing that, like it would make it inaccessible or wouldn't be able to be touched. (even though the Brokerage account would be in a Money Market Fund making better percentage return than the local bank accounts we have).
dbr
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by dbr »

It seems to be sufficient to link the bank account to the brokerage account.

Maybe it makes sense not to enable too many pathways into places where you have a lot of money.
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Stinky
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by Stinky »

Vanguard can push money to and pull money from my local bank account. Not the reverse.

As mentioned above, I don’t want too many access points into Vanguard, where most of our money is.
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lgb
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by lgb »

Interesting - I guess in our case, the local bank is housing the emergency fund of 100K which I'd like more to go over into the brokerage account to make some more while just basically sitting there year after year, but the spouse likes the local bank to house that...whereas the Brokerage account only has about $35K in it presently and I was hoping to shovel a bit more into that over time - however the Brokerage custodian does hold some Inherited IRA and Inherited ROTH IRA $5K, IRA $150K...but most of our own actual retirement investments are with another custodian. I've also got about 400K of cash in a different local bank account where I might like to do the same thing and have that cash that also just sits there doing nothing that has a bit more flow out (to pay for product we buy for customers) and in (we wait for customer to pay for said product plus the extra margin we get)

It kills me to have so much cash in the local banks not doing anything for us and I don't know how to get spouse to realize it could do better possibly with some portion shifted over to the Brokerage account.

Maybe it isn't worth fiddling with.

I appreciate the feedback and thoughts!
MishkaWorries
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by MishkaWorries »

lgb wrote: Sun Jun 21, 2020 8:50 am ACH is or is like a EFT (Electronics Funds Transfer) yes? ...and takes a couple/few days and may not incur a fee depending upon your local bank or if the other direction the investment custodian?

It seems like there could be benefit to having both the local bank and the investment custodian to each similarly have the Brokerage account and Local Bank account connected.

Just trying to convince my spouse with solid reasons to connect the Local Bank with the Brokerage account, they seemed to think connecting the Brokerage account with the local bank made sense when we opened up the Brokerage account, but when I suggested we could do the same with the local bank referencing the Brokerage account I got some concerns. My thought was it would make sense to move excess cash in the local Bank account over to the Brokerage account and there was concern about doing that, like it would make it inaccessible or wouldn't be able to be touched. (even though the Brokerage account would be in a Money Market Fund making better percentage return than the local bank accounts we have).
We only use the brokerage account to push or pull money. We've never felt a need to allow our bank to do it too.

For instance, I go to Vanguard and ask them to transfer $1,000 from our bank account to our brokerage account. A couple of clicks later, I have $1,000 at Vanguard I can immediately invest (or in your case, immediately start earning the higher interest).

Money Market Accounts are paying small rates right now. I think Vanguard's money market is .22%. Our savings account pays a whopping 1.0%. No guarantee the money market account will pay better interest than your bank.
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dbr
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by dbr »

The alternative would be an all-in-one account at a broker such as viewtopic.php?f=2&t=266538

But that is not exactly a local bank though Fidelity does have offices in most large cities
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whodidntante
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by whodidntante »

TomatoTomahto wrote: Fri Jun 19, 2020 2:49 pm One time I noticed that a mobile deposit did not go through at our local bank and they couldn’t find a record of it anywhere. Now I only deposit checks into an ATM with a receipt. They’re a small bank for a reason.
Maybe some glitch happened and the deposit was not successfully submitted.

Three years ago I deposited $1,800 in person at a local credit union. I filled in and signed a deposit slip, and all the information was correct. The teller seemed to struggle somehow with this routine transaction, but in the end she handed me a receipt with a smile. I looked at the receipt, and the first thing I noticed was the balance was about 10 grand more than I would keep in that account. Then I noticed the name and account number was wrong. The name was not similar to mine. I did a 180 and got her to fix it.

Mistakes happen, but that one was impressive.
crefwatch
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by crefwatch »

When I do a mobile deposit into my Too Big To Fail bank, they tell me to write "Deposited" on the check and keep it for ten days. Honestly, so many people refuse or discard their credit card receipts nowadays (even, pre-Covid) that there seems to be little desire to check on our money managers' work.

We happen to be retired, so moving periodic expense money from our two years of cash-equivalents to our checking account is convenient with the Vanguard and bank accounts linked. There was a long period, recently, when the bank's Money Market Savings account was paying substantially more than Vanguard's MMF, so I adjusted movements accordingly. It's not true anymore. (I don't bother to chase cash yield, the way frequent posters on this board sometimes do.)
Alan S.
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by Alan S. »

lgb wrote: Sun Jun 21, 2020 9:24 am Interesting - I guess in our case, the local bank is housing the emergency fund of 100K which I'd like more to go over into the brokerage account to make some more while just basically sitting there year after year, but the spouse likes the local bank to house that...whereas the Brokerage account only has about $35K in it presently and I was hoping to shovel a bit more into that over time - however the Brokerage custodian does hold some Inherited IRA and Inherited ROTH IRA $5K, IRA $150K...but most of our own actual retirement investments are with another custodian. I've also got about 400K of cash in a different local bank account where I might like to do the same thing and have that cash that also just sits there doing nothing that has a bit more flow out (to pay for product we buy for customers) and in (we wait for customer to pay for said product plus the extra margin we get)

It kills me to have so much cash in the local banks not doing anything for us and I don't know how to get spouse to realize it could do better possibly with some portion shifted over to the Brokerage account.

Maybe it isn't worth fiddling with.

I appreciate the feedback and thoughts!
If the brokerage account is linked to your local bank, you should be able to log in to the brokerage account and either request a transfer out of the brokerage to your local bank OR request a transfer from the bank to the brokerage account. In other words, you probably already have a two way transfer facility set up, and you don't need to initiate any of these transfers from your local bank.
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by TropikThunder »

TomatoTomahto wrote: Fri Jun 19, 2020 2:49 pm One time I noticed that a mobile deposit did not go through at our local bank and they couldn’t find a record of it anywhere. Now I only deposit checks into an ATM with a receipt. They’re a small bank for a reason.
That seems completely backwards to me. If you deposit a check in an ATM, it’s gone and out of your possession. If it doesn’t show up in your account, what can you do about it except have the check reissued (which night take a while or not be possible in some cases)? The bank isn’t going to just take your receipt as proof since you can deposit an empty envelope and claim it contained a check. At least with mobile deposit you still have the physical check and can deposit it again in person.
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TomatoTomahto
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by TomatoTomahto »

TropikThunder wrote: Sun Jun 21, 2020 5:14 pm
TomatoTomahto wrote: Fri Jun 19, 2020 2:49 pm One time I noticed that a mobile deposit did not go through at our local bank and they couldn’t find a record of it anywhere. Now I only deposit checks into an ATM with a receipt. They’re a small bank for a reason.
That seems completely backwards to me. If you deposit a check in an ATM, it’s gone and out of your possession. If it doesn’t show up in your account, what can you do about it except have the check reissued (which night take a while or not be possible in some cases)? The bank isn’t going to just take your receipt as proof since you can deposit an empty envelope and claim it contained a check. At least with mobile deposit you still have the physical check and can deposit it again in person.
Our bank receipts include a picture of the deposited check.
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Ged
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by Ged »

I pay my credit cards from my brokerage account cash management function at Fidelity. This sometimes includes my local bank card.

When I want to transfer funds to my local bank, say for unusual amounts of cash, I deposit a check written against my brokerage account to my local bank. I do not have a linkage that allows pulling funds from my brokerage account to my local bank.

I have one of my pensions auto-deposited to my local bank. This supplies a base flow of money that usually covers local spending money and my use of the local bank's credit card.

I also have some family members listed as authorized users of the local bank credit card. This feature is rarely used.

To be honest I've been much more impressed by the security practices of Fidelity than my local bank. As such I am very disinclined to allow pulling of money from my brokerage to my local bank.
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dratkinson
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Re: Any benefit to linking your Brokerage account to your Local Bank account?

Post by dratkinson »

I don't believe the links AT our banks/CUs to our investment accounts are necessary, and can sometimes cause problems. However, links AT our investing accounts to our bank/CU accounts are most helpful.


1. I link my investment accounts to my bank/CU accounts, not the other way around.
--Push/pull transactions initiated from my investing accounts are free
--My bank/CU allow free external push/pull transactions.
--My small CU charges a fee for internal push transactions.

By not establishing any investing links AT any bank/CU, then I can't forget and generate a bank/CU fee.


2. My taxable investment accounts use specificID cost basis (except for mmkt).
--A bank/CU pull has no way of identifying specific shares to sell.
--I believe investment sales must be internally initiated... can't be initiated by bank/CU external pull.

By not establishing any investing links AT any bank/CU, then I can't mess up sells that require specificID.
And no need for investment link AT bank/CU if can't initiate a sale.


3. My bank/CU are open on Saturday, but not my investing accounts.
--Any push/pull from bank/CU will still require 2-3 business days based on investing firms' business days.

Since money transfer is based on investing firms' business days, links AT bank/CU does not speed up the process.


4. External links establish all of my bank/CU account activity.
--Pension withholds taxes, sends allotment to Vanguard mmkt, and 1mo of living expenses to bank checking.
--SS withholds taxes, send remainder to Vanguard mmkt.
--3rd-party single-state muni fund sends monthly distribution to CU savings.

I rebalance everything after reconciling monthly statements, by calling investing firms' CSRs. They provide a double-check that helps reduce my chance of making a processing mistake. (First time I tried, I learned my 3rd-party single-state muni fund only sells by specificID (TLH) by letter or fax. CSR sent fillable PDF "Letter of Instructions"; this information was not in prospectus.)


Bottom line. I've never found it beneficial to provide my bank/CU with a link to my investing accounts. However, links at my investing accounts to my bank/CU accounts have been most helpful.



I do like to be able to walk into a B&M bank/CU to make deposits/withdrawals. I double-check the teller's receipt to ensure the transaction was recorded correctly. (We all make mistakes sometimes. Appreciate it when folks catch mine.)

My mailed checking statements include a picture of each cashed check. Paid property tax by drop-box check in April and asked for a mailed receipt---couldn't walk-in this time. No mailed receipt yet, but bank statement showed picture of cashed check, so assume I'm okay. "Curse you", pandemic.

I reconcile my mailed bank/CU/investing statements. Did find an unrecognized $50 CU savings credit on one statement. Assumed CU mis-credited a deposit. Had to fill out form saying money wasn't mind; took CU one statement cycle to fix their mistake.

Would have been most upset if CU had mistakenly drained my small savings. Felt sorry for the guy who didn't get the deposit on his account. Hope he's happy I helped fix CU's mistake. Hope he checks his receipts more closely in future.
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