Considering Schwab

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: Considering Schwab

Post by jeffyscott »

MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
Still, that's more than the ER for either fund.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: Considering Schwab

Post by urban »

MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
You are correct, this is exactly what I meant. Sorry if I did not make it clear enough that 3.3% performance drag at Schwab is in comparison with performance at VG or Fidelity.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: Considering Schwab

Post by urban »

toddthebod wrote: Sun May 26, 2024 8:09 pm
urban wrote: Sun May 26, 2024 7:03 pm
zie wrote: Sun May 26, 2024 6:38 pm
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
3.29% sounds meaningful, but if we bring it into actual cash:

On $10k invested @ 5%/yr interest($500/yr), we are talking about $500 x 3.29% = $16.45/yr. I guess each of us can decide differently if $16 is a big deal or not. Clearly I don't think it is.
Yes for $10k/year it is not a big deal. But for somebody I know who considers to keep $200k dry powder in SGOV or TFLO at Schwab it would be around $330/year. So it becomes somehow a big deal for them.
They are losing way more than $330/year by trying to time the market.
They never lost a dime buying on RBD and selling on RGD. So far, of course.
zie
Posts: 1220
Joined: Sun Mar 22, 2020 4:35 pm

Re: Considering Schwab

Post by zie »

urban wrote: Sun May 26, 2024 7:03 pm
zie wrote: Sun May 26, 2024 6:38 pm
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
3.29% sounds meaningful, but if we bring it into actual cash:

On $10k invested @ 5%/yr interest($500/yr), we are talking about $500 x 3.29% = $16.45/yr. I guess each of us can decide differently if $16 is a big deal or not. Clearly I don't think it is.
Yes for $10k/year it is not a big deal. But for somebody I know who considers to keep $200k dry powder in SGOV or TFLO at Schwab it would be around $330/year. So it becomes somehow a big deal for them.
To me $330 on 200k isn't a big deal either, but If this really matters to them, they maybe shouldn't be holding much if any cash @ Schwab, as Schwab is terrible with cash, always has been, probably always will be. They should use Vanguard, Fidelity, IBKR, etc. Even BOA/Merrill Edge has a better cash story(though only barely, see preferred deposit and their MMF's).

If Cash is your thing, Schwab is a bad choice, though not as bad as a typical bank, since you can own a MMF or ETF "equivalent".

All that said $200k in dry powder is probably a bad choice too. :). But let's say your buddy has $10M invested, that's 2% of their portfolio, so even if they were getting 10% return on their cash, with zero drag, it would not really make a dent in their net worth. Is that $330 even noticeable? So in the grand scheme of things, all of this optimization work still may not matter. That said, if they only have $500k invested, then that $200k is a huge chunk of their NW and it matters a whole lot more.

Personally, my cash is well under 1% of my net worth, so even if it was returning 20% for years, it wouldn't make any noticeable dent in anything. That said, if cash really was earning 20%/yr, especially in real terms, I'd significantly up my cash allocation. Though the world would probably be in pretty dire circumstances if that was the case.
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: Considering Schwab

Post by urban »

zie wrote: Mon May 27, 2024 1:33 pm To me $330 on 200k isn't a big deal either, but If this really matters to them, they maybe shouldn't be holding much if any cash @ Schwab, as Schwab is terrible with cash, always has been, probably always will be. They should use Vanguard, Fidelity, IBKR, etc. Even BOA/Merrill Edge has a better cash story(though only barely, see preferred deposit and their MMF's).

If Cash is your thing, Schwab is a bad choice, though not as bad as a typical bank, since you can own a MMF or ETF "equivalent".

All that said $200k in dry powder is probably a bad choice too. :). But let's say your buddy has $10M invested, that's 2% of their portfolio, so even if they were getting 10% return on their cash, with zero drag, it would not really make a dent in their net worth. Is that $330 even noticeable? So in the grand scheme of things, all of this optimization work still may not matter. That said, if they only have $500k invested, then that $200k is a huge chunk of their NW and it matters a whole lot more.

Personally, my cash is well under 1% of my net worth, so even if it was returning 20% for years, it wouldn't make any noticeable dent in anything. That said, if cash really was earning 20%/yr, especially in real terms, I'd significantly up my cash allocation. Though the world would probably be in pretty dire circumstances if that was the case.
Technically, you are correct. However, in their case it is more mental. They fill very comfortable at the current stage in their life to have a sizeable chunk of spare cash, outside of significant brokerage accounts that they almost do not touch except occasional TLH or sporadic realigning some positions. That chunk of spare case they keep in cash funds, T-bills, and such, so that it is available almost instantly. They use part of their cash to buy and sell on RBD and RGD, so it does not happen often.
This MO makes them comfortable, whether technically it makes financial sense or not. They can afford it.
zie
Posts: 1220
Joined: Sun Mar 22, 2020 4:35 pm

Re: Considering Schwab

Post by zie »

urban wrote: Mon May 27, 2024 2:28 pm
zie wrote: Mon May 27, 2024 1:33 pm To me $330 on 200k isn't a big deal either, but If this really matters to them, they maybe shouldn't be holding much if any cash @ Schwab, as Schwab is terrible with cash, always has been, probably always will be. They should use Vanguard, Fidelity, IBKR, etc. Even BOA/Merrill Edge has a better cash story(though only barely, see preferred deposit and their MMF's).

If Cash is your thing, Schwab is a bad choice, though not as bad as a typical bank, since you can own a MMF or ETF "equivalent".

All that said $200k in dry powder is probably a bad choice too. :). But let's say your buddy has $10M invested, that's 2% of their portfolio, so even if they were getting 10% return on their cash, with zero drag, it would not really make a dent in their net worth. Is that $330 even noticeable? So in the grand scheme of things, all of this optimization work still may not matter. That said, if they only have $500k invested, then that $200k is a huge chunk of their NW and it matters a whole lot more.

Personally, my cash is well under 1% of my net worth, so even if it was returning 20% for years, it wouldn't make any noticeable dent in anything. That said, if cash really was earning 20%/yr, especially in real terms, I'd significantly up my cash allocation. Though the world would probably be in pretty dire circumstances if that was the case.
Technically, you are correct. However, in their case it is more mental. They fill very comfortable at the current stage in their life to have a sizeable chunk of spare cash, outside of significant brokerage accounts that they almost do not touch except occasional TLH or sporadic realigning some positions. That chunk of spare case they keep in cash funds, T-bills, and such, so that it is available almost instantly. They use part of their cash to buy and sell on RBD and RGD, so it does not happen often.
This MO makes them comfortable, whether technically it makes financial sense or not. They can afford it.
It's amazing how important mental/emotional accounting can be in one's finances. I'm embrace this same idea of mental/emotional accounting: Even though it costs me a bit more, I invest in AOA(80% global equities, 20% bonds) in taxable, to avoid complications and embrace convenience/laziness. I have the ability to do it a little cheaper with VT & BNDW, or even only VT in taxable and hold BND/BNDW elsewhere, but to me, it's not worth the hassle and complication. Also, I'm investing for my heir(s), and I don't want them to have to adjust things whenever they inherit(as I'm unlikely to need any of my taxable account during my lifetime).
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
User avatar
Doc
Posts: 10623
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: Considering Schwab

Post by Doc »

123 wrote: Thu Apr 18, 2024 12:26 pm You can get higher MMF interest but you have to use purchased MMFs which you have to sell to cash before cash is available.
...

Because you have to have cash to buy anything (assuming non-margin account) you lose interest between the date of your purchase and settlement date, this can really up your trading costs if you do buys with large tran$action amount$.
Now that settlement times have been reduced to one day these "problems" may no longer exist.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
Freefun
Posts: 1239
Joined: Sun Jan 14, 2018 2:55 pm

Re: Considering Schwab

Post by Freefun »

I don't know if anyone's mentioned this yet. Schwab and Fidelity handle auto roll treasuries differently. With Schwab when a treasury matures and you have auto roll, you have to wait until the next auction. So for example, this might result in a two week waiting period where Schwab gets to use your cash. With Fido they buy a new treasury usually on the same day that the old one matured.

I have accounts at both and are generally pleased. I do use auto roll at both but they're relatively infrequent.

When I transferred a large balance to Schwab I requested and received a bonus as well as no fees on all Vanguard funds.
Remember when you wanted what you currently have?
User avatar
Doc
Posts: 10623
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: Considering Schwab

Post by Doc »

Freefun wrote: Tue May 28, 2024 11:21 am With Schwab when a treasury matures and you have auto roll, you have to wait until the next auction.
I was told by my Schwab advisor just this morning that this is no longer true. The wait "until net auction" is soemthing that went away some time ago.

In any case I just bought a whopping big ($1000) 4 week T-bill at auction with auto roll turned on. I'll see.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: Considering Schwab

Post by jeffyscott »

^ Kevin just tested Schwab's autoroll March, and there was still a one week gap:

viewtopic.php?p=7764356#p7764356
User avatar
Doc
Posts: 10623
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: Considering Schwab

Post by Doc »

jeffyscott wrote: Tue May 28, 2024 2:20 pm ^ Kevin just tested Schwab's autoroll March, and there was still a one week gap:

viewtopic.php?p=7764356#p7764356
Kevin: "I can now verify that there continues to be a one week lag in auto roll at Schwab."

That post was a week ago. The one day settlement starts on 5/31/24 (5/30/24 ?).

That said my Schwab rep said the problem had gone away a while ago.

Any way that's why I am testing it with an auto roll of my humongous $1000 4wk bill purchase.
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: Considering Schwab

Post by jeffyscott »

Doc wrote: Tue May 28, 2024 2:47 pm That post was a week ago. The one day settlement starts on 5/31/24 (5/30/24 ?).

That said my Schwab rep said the problem had gone away a while ago.

Any way that's why I am testing it with an auto roll of my humongous $1000 4wk bill purchase.
Well, it was March. So, either your Schwab rep is mistaken or "some time ago" means at most about a couple of months ago. I guess you'll find out which UT is in about a month.

Not sure why you would think settlement times for stocks has anything to do with it. :confused

There's no changes to settlement for treasury auctions (and secondary were already one day). Today's auctions settle on Thursday and Friday, for example.
User avatar
Doc
Posts: 10623
Joined: Sat Feb 24, 2007 12:10 pm
Location: Two left turns from Larry

Re: Considering Schwab

Post by Doc »

jeffyscott wrote: Tue May 28, 2024 3:21 pm
Doc wrote: Tue May 28, 2024 2:47 pm ...
Not sure why you would think settlement times for stocks has anything to do with it. :confused
Because I'm a lot older than you and don't remember well? :D
A scientist looks for THE answer to a problem, an engineer looks for AN answer and lawyers ONLY have opinions. Investing is not a science.
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: Considering Schwab

Post by jeffyscott »

Doc wrote: Wed May 29, 2024 9:56 am
jeffyscott wrote: Tue May 28, 2024 3:21 pm
Doc wrote: Tue May 28, 2024 2:47 pm ...
Not sure why you would think settlement times for stocks has anything to do with it. :confused
Because I'm a lot older than you and don't remember well? :D
Hopefully you will remember to update us on the result of your experiment :mrgreen: , especially if it differs from Kevin's. :sharebeer
observe_and_judge
Posts: 45
Joined: Sun Jan 07, 2024 2:06 pm

Re: Considering Schwab

Post by observe_and_judge »

jeffyscott wrote: Mon May 27, 2024 7:43 am
MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
Still, that's more than the ER for either fund.
I don't think the above is accurate anymore. For SGOV, the dividend is paid out the same day it posts at Schwab. I just checked my account with a small number of SGOV, and as of this month the dividend payment/re-investment was same day, which was 05/07/2024.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: Considering Schwab

Post by urban »

observe_and_judge wrote: Wed May 29, 2024 11:06 am
jeffyscott wrote: Mon May 27, 2024 7:43 am
MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
Still, that's more than the ER for either fund.
I don't think the above is accurate anymore. For SGOV, the dividend is paid out the same day it posts at Schwab. I just checked my account with a small number of SGOV, and as of this month the dividend payment/re-investment was same day, which was 05/07/2024.
12/13/2023 I bought 1 share of SGOV at Schwab, and 01/29/2024 I sold it. SGOV pay date was 12/20/2023 and after hours the money were posted in my account, and 12/21/2023 (next day) Schwab reinvested it. Here is extract of my history transaction for SGOV at Schwab:

01/29/2024 Sell
Trade Details SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
1.0045
$100.6969 $101.15

12/21/2023 Reinvest Shares
SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
0.0045
$100.17 -$0.45

12/20/2023 Reinvest Dividend
SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
$0.45

12/13/2023 Buy
Trade Details SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
1
$100.455

For what it worth, all my dividend reinvestments at Schwab happen on the next day after pay date.

Edit: I need to correct myself, particularly the last sentence. It seems like for my stock ETFs the last time dividend reinvestments were in the end of March this year, as usual on the next day after pay dates. However for my bond ETFs the last dividend reinvestments happen in May of this year, and according to the transaction history it were on their pay dates, without customary one day delay. Remains to be seen if Schwab keeps improving.
Kbg
Posts: 409
Joined: Thu Mar 23, 2017 11:33 am

Re: Considering Schwab

Post by Kbg »

The above reflects my records as well.

Personally I don't totally understand the cash balance concern. I don't find it too difficult to manage things by setting everything to reinvest dividends which solves most of the problem.

SGOV is an easy and excellent "parking cash" ETF. If one is comfortable with a tad more volatility I'm a big fan of XHLF as well and use it for most of my parked cash needs. XHLF is a 6 mo duration fund and holds 1 year through 0 month time remaining treasuries and is dirt cheap.
RetiredAL
Posts: 3741
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Considering Schwab

Post by RetiredAL »

A result of ongoing dialog about Schwab being slow with dividends, both in this thread and in other threads, I did a comparison Schwab vs Fidelity with SGOV, which paid today. I started this last month so I could buy SGOV at each brokerage, thus there is some overlap to additional later posts.

Results: As of "before the open" this morning 6/7, both Fidelity and Schwab showed as having received and reinvested the dividend.

Image


urban wrote: Wed May 29, 2024 11:44 am
observe_and_judge wrote: Wed May 29, 2024 11:06 am
jeffyscott wrote: Mon May 27, 2024 7:43 am
MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
Still, that's more than the ER for either fund.
I don't think the above is accurate anymore. For SGOV, the dividend is paid out the same day it posts at Schwab. I just checked my account with a small number of SGOV, and as of this month the dividend payment/re-investment was same day, which was 05/07/2024.
12/13/2023 I bought 1 share of SGOV at Schwab, and 01/29/2024 I sold it. SGOV pay date was 12/20/2023 and after hours the money were posted in my account, and 12/21/2023 (next day) Schwab reinvested it. Here is extract of my history transaction for SGOV at Schwab:

01/29/2024 Sell
Trade Details SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
1.0045
$100.6969 $101.15

12/21/2023 Reinvest Shares
SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
0.0045
$100.17 -$0.45

12/20/2023 Reinvest Dividend
SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
$0.45

12/13/2023 Buy
Trade Details SGOV
ISHARES 0 TO 3 MNTH TREASURY BND ETF
1
$100.455

For what it worth, all my dividend reinvestments at Schwab happen on the next day after pay date.

Edit: I need to correct myself, particularly the last sentence. It seems like for my stock ETFs the last time dividend reinvestments were in the end of March this year, as usual on the next day after pay dates. However for my bond ETFs the last dividend reinvestments happen in May of this year, and according to the transaction history it were on their pay dates, without customary one day delay. Remains to be seen if Schwab keeps improving.
zero_coupon
Posts: 671
Joined: Sun Jun 05, 2022 5:26 am

Re: How is the Schwab experience?

Post by zero_coupon »

MnD wrote: Sun May 19, 2024 5:32 pm 30+ years at Schwab and it's been great. Including cash management to the point where we got rid of all bank accounts except Schwab.
You just have to understand the rules of the road you are driving on.

We don't keep a lot in checking - pretty much money in and money out.
1. Does transferring money from a Schwab brokerage MMF to Schwab checking require a multi-step process (i.e. sell MMF, wait a day to settle, then manually transfer to checking)? Or can it be done in a single step?

2. Can you traransfer between Schwab brokerage MMFs and Schwab checking using Tele-broker (automated phone service)? If so, is there a fee for this? Can the transfer be accomplished by talking to a CSR (is there a fee for this)? Or is it only possible online?

3. Can you receive email alerts whenever a transaction (deposit/debit/withdrawal) occurs in Schwab checking? Can these alerts include the updated account balance?

4. Presumably, Schwab checking can overdraft from Schwab brokerage. However, what "sources" in the brokerage account are available to supply funds for this overdraft protection? Only the settlement position? Or money market funds too?
toddthebod
Posts: 6737
Joined: Wed May 18, 2022 12:42 pm

Re: How is the Schwab experience?

Post by toddthebod »

zero_coupon wrote: Sat Jun 08, 2024 2:00 pm
MnD wrote: Sun May 19, 2024 5:32 pm 30+ years at Schwab and it's been great. Including cash management to the point where we got rid of all bank accounts except Schwab.
You just have to understand the rules of the road you are driving on.

We don't keep a lot in checking - pretty much money in and money out.
1. Does transferring money from a Schwab brokerage MMF to Schwab checking require a multi-step process (i.e. sell MMF, wait a day to settle, then manually transfer to checking)? Or can it be done in a single step?

2. Can you traransfer between Schwab brokerage MMFs and Schwab checking using Tele-broker (automated phone service)? If so, is there a fee for this? Can the transfer be accomplished by talking to a CSR (is there a fee for this)? Or is it only possible online?

3. Can you receive email alerts whenever a transaction (deposit/debit/withdrawal) occurs in Schwab checking? Can these alerts include the updated account balance?

4. Presumably, Schwab checking can overdraft from Schwab brokerage. However, what "sources" in the brokerage account are available to supply funds for this overdraft protection? Only the settlement position? Or money market funds too?
1. Two steps, which is why some people recommend SGOV instead.
2. Don't know.
3. Yes to the first, no to the second.
4. Cash and margin.
zero_coupon
Posts: 671
Joined: Sun Jun 05, 2022 5:26 am

Re: How is the Schwab experience?

Post by zero_coupon »

toddthebod wrote: Sat Jun 08, 2024 2:42 pm
zero_coupon wrote: Sat Jun 08, 2024 2:00 pm
MnD wrote: Sun May 19, 2024 5:32 pm 30+ years at Schwab and it's been great. Including cash management to the point where we got rid of all bank accounts except Schwab.
You just have to understand the rules of the road you are driving on.

We don't keep a lot in checking - pretty much money in and money out.
1. Does transferring money from a Schwab brokerage MMF to Schwab checking require a multi-step process (i.e. sell MMF, wait a day to settle, then manually transfer to checking)? Or can it be done in a single step?

2. Can you traransfer between Schwab brokerage MMFs and Schwab checking using Tele-broker (automated phone service)? If so, is there a fee for this? Can the transfer be accomplished by talking to a CSR (is there a fee for this)? Or is it only possible online?

3. Can you receive email alerts whenever a transaction (deposit/debit/withdrawal) occurs in Schwab checking? Can these alerts include the updated account balance?

4. Presumably, Schwab checking can overdraft from Schwab brokerage. However, what "sources" in the brokerage account are available to supply funds for this overdraft protection? Only the settlement position? Or money market funds too?
1. Two steps, which is why some people recommend SGOV instead.
2. Don't know.
3. Yes to the first, no to the second.
4. Cash and margin.
Thanks.

Regarding (1.), do you have to wait a day (after selling MMF) before the money can be transferred to checking?

Also, if using SGOV, the money is immediately available to transfer to checking? For withdrawal?
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: Considering Schwab

Post by jeffyscott »

^ Related to 3, you can get an alert if your checking balance falls below $X.
toddthebod
Posts: 6737
Joined: Wed May 18, 2022 12:42 pm

Re: How is the Schwab experience?

Post by toddthebod »

zero_coupon wrote: Sat Jun 08, 2024 3:00 pm
toddthebod wrote: Sat Jun 08, 2024 2:42 pm
zero_coupon wrote: Sat Jun 08, 2024 2:00 pm
MnD wrote: Sun May 19, 2024 5:32 pm 30+ years at Schwab and it's been great. Including cash management to the point where we got rid of all bank accounts except Schwab.
You just have to understand the rules of the road you are driving on.

We don't keep a lot in checking - pretty much money in and money out.
1. Does transferring money from a Schwab brokerage MMF to Schwab checking require a multi-step process (i.e. sell MMF, wait a day to settle, then manually transfer to checking)? Or can it be done in a single step?

2. Can you traransfer between Schwab brokerage MMFs and Schwab checking using Tele-broker (automated phone service)? If so, is there a fee for this? Can the transfer be accomplished by talking to a CSR (is there a fee for this)? Or is it only possible online?

3. Can you receive email alerts whenever a transaction (deposit/debit/withdrawal) occurs in Schwab checking? Can these alerts include the updated account balance?

4. Presumably, Schwab checking can overdraft from Schwab brokerage. However, what "sources" in the brokerage account are available to supply funds for this overdraft protection? Only the settlement position? Or money market funds too?
1. Two steps, which is why some people recommend SGOV instead.
2. Don't know.
3. Yes to the first, no to the second.
4. Cash and margin.
Thanks.

Regarding (1.), do you have to wait a day (after selling MMF) before the money can be transferred to checking?

Also, if using SGOV, the money is immediately available to transfer to checking? For withdrawal?
The MMF trade is executed overnight versus SGOV which is executed immediately. I assume that means the cash is available sooner, but I don't actually bother, so I can't answer your specific questions, sorry.
User avatar
typical.investor
Posts: 5308
Joined: Mon Jun 11, 2018 3:17 am

Re: How is the Schwab experience?

Post by typical.investor »

toddthebod wrote: Sat Jun 08, 2024 2:42 pm
zero_coupon wrote: Sat Jun 08, 2024 2:00 pm
MnD wrote: Sun May 19, 2024 5:32 pm 30+ years at Schwab and it's been great. Including cash management to the point where we got rid of all bank accounts except Schwab.
You just have to understand the rules of the road you are driving on.

We don't keep a lot in checking - pretty much money in and money out.
1. Does transferring money from a Schwab brokerage MMF to Schwab checking require a multi-step process (i.e. sell MMF, wait a day to settle, then manually transfer to checking)? Or can it be done in a single step?

2. Can you traransfer between Schwab brokerage MMFs and Schwab checking using Tele-broker (automated phone service)? If so, is there a fee for this? Can the transfer be accomplished by talking to a CSR (is there a fee for this)? Or is it only possible online?

3. Can you receive email alerts whenever a transaction (deposit/debit/withdrawal) occurs in Schwab checking? Can these alerts include the updated account balance?

4. Presumably, Schwab checking can overdraft from Schwab brokerage. However, what "sources" in the brokerage account are available to supply funds for this overdraft protection? Only the settlement position? Or money market funds too?
1. Two steps, which is why some people recommend SGOV instead.
SGOV is still two steps to get the money to checking, isn’t it?

How do you place a sell in brokerage and have the money appear in checking?

I find the Schwab money funds to be much more convenient than a ETF because you can place trades when the market isn’t
open.

I have never had overdraft from brokerage to checking fail, so really only manually move money to checking to earmark it for spending and reinvest the remaining in brokerage.

Generally for me though, if the sale executes on the first, it will be available on the second to move to checking before my credit card makes its auto debit on the second.
toddthebod
Posts: 6737
Joined: Wed May 18, 2022 12:42 pm

Re: How is the Schwab experience?

Post by toddthebod »

typical.investor wrote: Sat Jun 08, 2024 4:18 pm SGOV is still two steps to get the money to checking, isn’t it?
I misspoke. I meant to point out that with the MMF, you need to place a sell order, then come back the next day to move the money, while with SGOV, you should be able to sell and move the money on the same website visit.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: How is the Schwab experience?

Post by urban »

toddthebod wrote: Sat Jun 08, 2024 4:25 pm
typical.investor wrote: Sat Jun 08, 2024 4:18 pm SGOV is still two steps to get the money to checking, isn’t it?
I misspoke. I meant to point out that with the MMF, you need to place a sell order, then come back the next day to move the money, while with SGOV, you should be able to sell and move the money on the same website visit.
SGOV is an ETF, so it settles the next day, right? So how it is possible to sell and move the proceeds the same day? Are money are available in checking on the same day?
zero_coupon
Posts: 671
Joined: Sun Jun 05, 2022 5:26 am

Re: How is the Schwab experience?

Post by zero_coupon »

typical.investor wrote: Sat Jun 08, 2024 4:18 pm Generally for me though, if the sale executes on the first, it will be available on the second to move to checking before my credit card makes its auto debit on the second.
So do you actually return on the second to manualy move money to checking? Or do you just let the money overdraft from brokerage?
User avatar
typical.investor
Posts: 5308
Joined: Mon Jun 11, 2018 3:17 am

Re: How is the Schwab experience?

Post by typical.investor »

zero_coupon wrote: Sun Jun 09, 2024 12:35 am
typical.investor wrote: Sat Jun 08, 2024 4:18 pm Generally for me though, if the sale executes on the first, it will be available on the second to move to checking before my credit card makes its auto debit on the second.
So do you actually return on the second to manualy move money to checking? Or do you just let the money overdraft from brokerage?
I usually just let it overdraft.

All my payments are due around the first of the month, so I usually just make one sell to cover things.

In June and December when dividends might exceed expenses, I might move the amount I need for expenses into checking. Then I will reinvest the remaining in brokerage.
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: How is the Schwab experience?

Post by jeffyscott »

urban wrote: Sat Jun 08, 2024 10:10 pm
toddthebod wrote: Sat Jun 08, 2024 4:25 pm
typical.investor wrote: Sat Jun 08, 2024 4:18 pm SGOV is still two steps to get the money to a isn’t it?
I misspoke. I meant to point out that with the MMF, you need to place a sell order, then come back the next day to move the money, while with SGOV, you should be able to sell and move the money on the same website visit.
SGOV is an ETF, so it settles the next day, right? So how it is possible to sell and move the proceeds the same day? Are money are available in checking on the same day?
I don't know, since I don't use ETFs or operate so close to the edge, but it's possible they could let unsettled money move to a different account (but probably not be withdrawn). Schwab allows trading with unsettled funds, which seems similar.

It seems kind of meaningless which account the money is in, if it can't be used for paying bills and there's overdraft protection. Also I don't see an advantage to SGOV over a MM for the same reasons (other than lower ER).
bberris
Posts: 2470
Joined: Sun Feb 20, 2011 8:44 am

Re: Considering Schwab

Post by bberris »

I think I spend more on doordash tips than I lose on the low cash balance interest rate at Schwab. My bank doesn't pay any interest at all on checking.
Target2019
Posts: 1006
Joined: Sat Mar 03, 2007 4:30 pm

Re: Considering Schwab

Post by Target2019 »

WhitePuma wrote: Thu Apr 18, 2024 11:23 am
lostcoast2023 wrote: Thu Apr 18, 2024 10:38 am I was a happy Schwab customer for many years. Here are my main issues with them (that are not problems at Fidelity):
  • Payment for Order Flow
  • ATM Rebates at end of month
  • Low Interest Rates on idle cash
  • No Fractional Shares on ETFs
  • Credit card is Amex and less than 2%
  • Slow ACH
  • Slow Dividend Payments
That said, if you don't care about these things, they are excellent to work with.
Thanks for sharing this list. They are definitely marks against Schwab in my book too. But on the plus side, it sounds like if I were to just move a mutual fund (like VTSAX) over and hold it, none of these would apply— is that a correct interpretation?
WhitePuma,
Did you make this move?

I once moved a Vanguard mutual fund to our Schwab brokerage. I didn't intend to invest more in the fund, so the move was meant as a consolidation, and that allowed us to close one more Vanguard account.

I didn't reinvest dividends, but I know that could have been easily turned on from the Positions tab.

If you have a linked checking account, then you can transfer uninvested cash to it, and bill-pay, write checks, etc.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: How is the Schwab experience?

Post by urban »

jeffyscott wrote: Sun Jun 09, 2024 6:06 am Also I don't see an advantage to SGOV over a MM for the same reasons (other than lower ER).
Only if you live in a state with no income tax.
UpperNwGuy
Posts: 9746
Joined: Sun Oct 08, 2017 7:16 pm

Re: How is the Schwab experience?

Post by UpperNwGuy »

urban wrote: Sun Jun 09, 2024 9:21 am
jeffyscott wrote: Sun Jun 09, 2024 6:06 am Also I don't see an advantage to SGOV over a MM for the same reasons (other than lower ER).
Only if you live in a state with no income tax.
I am confused. Schwab's SNSXX US Treasury Money Market Fund should, like SGOV, be free of state income taxes.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: How is the Schwab experience?

Post by urban »

UpperNwGuy wrote: Sun Jun 09, 2024 10:17 am
urban wrote: Sun Jun 09, 2024 9:21 am
jeffyscott wrote: Sun Jun 09, 2024 6:06 am Also I don't see an advantage to SGOV over a MM for the same reasons (other than lower ER).
Only if you live in a state with no income tax.
I am confused. Schwab's SNSXX US Treasury Money Market Fund should, like SGOV, be free of state income taxes.
For US Treasury MMF, yes. But not for other Schwab MMFs.
UpperNwGuy
Posts: 9746
Joined: Sun Oct 08, 2017 7:16 pm

Re: How is the Schwab experience?

Post by UpperNwGuy »

urban wrote: Sun Jun 09, 2024 10:44 am
UpperNwGuy wrote: Sun Jun 09, 2024 10:17 am
urban wrote: Sun Jun 09, 2024 9:21 am
jeffyscott wrote: Sun Jun 09, 2024 6:06 am Also I don't see an advantage to SGOV over a MM for the same reasons (other than lower ER).
Only if you live in a state with no income tax.
I am confused. Schwab's SNSXX US Treasury Money Market Fund should, like SGOV, be free of state income taxes.
For US Treasury MMF, yes. But not for other Schwab MMFs.
That's true everywhere. Nothing unique about Schwab.
User avatar
jeffyscott
Posts: 13843
Joined: Tue Feb 27, 2007 8:12 am

Re: How is the Schwab experience?

Post by jeffyscott »

UpperNwGuy wrote: Sun Jun 09, 2024 11:28 am
urban wrote: Sun Jun 09, 2024 10:44 am
UpperNwGuy wrote: Sun Jun 09, 2024 10:17 am
urban wrote: Sun Jun 09, 2024 9:21 am
jeffyscott wrote: Sun Jun 09, 2024 6:06 am Also I don't see an advantage to SGOV over a MM for the same reasons (other than lower ER).
Only if you live in a state with no income tax.
I am confused. Schwab's SNSXX US Treasury Money Market Fund should, like SGOV, be free of state income taxes.
For US Treasury MMF, yes. But not for other Schwab MMFs.
That's true everywhere. Nothing unique about Schwab.
The context there was the idea that SGOV allows faster access to the funds seems likely to be incorrect.

The MM that's closest to SGOV would be SNSXX, so that's the logical alternative and what I use, along with T-bills*. Though, I guess I could've said lower costs (with that meant to include tax costs) is the only advantage, but then it could be argued that SGOV is safer than SWVXX.

* Since I have more than 80% of that cash in bills, I guess my costs are actually lower than if I were to use only SGOV.
Mardoc01
Posts: 206
Joined: Thu Aug 03, 2017 10:31 pm

Re: Considering Schwab

Post by Mardoc01 »

Didn’t Schwab grandfather their legacy clients to sweep into a mmf?…
Lyrrad
Posts: 1031
Joined: Sun Jul 27, 2008 10:59 am

Re: Considering Schwab

Post by Lyrrad »

MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
I believe that the performance difference is less.

Schwab reinvests ETF distributions 1 business day later than Fidelity. On average, this would result in reinvestment approximately 1.4 days later (since about 1/5 of the dividends would be delated over a weekend), or about 0.38% of the distribution amounts. If an ETF yielded 5%, this would result in an effective pre-tax cost of about 0.02%. The costs were roughly double before T+1. (This ignores the rate that Schwab pays on cash, which could accumulate for one day for each distribution.)


RetiredAL wrote: Fri Jun 07, 2024 11:48 am A result of ongoing dialog about Schwab being slow with dividends, both in this thread and in other threads, I did a comparison Schwab vs Fidelity with SGOV, which paid today. I started this last month so I could buy SGOV at each brokerage, thus there is some overlap to additional later posts.

Results: As of "before the open" this morning 6/7, both Fidelity and Schwab showed as having received and reinvested the dividend.
I believe Schwab reinvests the dividend on the day the dividend is paid, so it settles one day later. Fidelity reinvests earlier, so that the purchase settles on the day the dividend is paid.

It should be possible to observe this by looking at the reinvestment price.
RetiredAL
Posts: 3741
Joined: Tue Jun 06, 2017 12:09 am
Location: SF Bay Area

Re: Considering Schwab

Post by RetiredAL »

Lyrrad wrote: Sun Jun 09, 2024 1:42 pm
MoreTaxes wrote: Mon May 27, 2024 12:58 am
urban wrote: Sun May 26, 2024 11:24 am Actually, the 1 day a month (or 12 days a year) delay at Schwab (compare with VG or Fidelity) would cause about 3.3% performance drag:
1/30*100 = 3.33%, or 12/365*100 = 3.29%.
To clarify, when you say it's a 3.3% performance drag, that doesn't mean it turns an investment earning 5% into one earning 1.7%. It means that a 5% investment instead earns 5%*(1-3.29%) = 4.84%. I think it would be clearer to call that a 0.16% performance drag, not a 3.3% drag. Certainly 0.16% can be significant, but it's not like an actual 3% loss in performance.
I believe that the performance difference is less.

Schwab reinvests ETF distributions 1 business day later than Fidelity. On average, this would result in reinvestment approximately 1.4 days later (since about 1/5 of the dividends would be delated over a weekend), or about 0.38% of the distribution amounts. If an ETF yielded 5%, this would result in an effective pre-tax cost of about 0.02%. The costs were roughly double before T+1. (This ignores the rate that Schwab pays on cash, which could accumulate for one day for each distribution.)


RetiredAL wrote: Fri Jun 07, 2024 11:48 am A result of ongoing dialog about Schwab being slow with dividends, both in this thread and in other threads, I did a comparison Schwab vs Fidelity with SGOV, which paid today. I started this last month so I could buy SGOV at each brokerage, thus there is some overlap to additional later posts.

Results: As of "before the open" this morning 6/7, both Fidelity and Schwab showed as having received and reinvested the dividend.
I believe Schwab reinvests the dividend on the day the dividend is paid, so it settles one day later. Fidelity reinvests earlier, so that the purchase settles on the day the dividend is paid.

It should be possible to observe this by looking at the reinvestment price.
I had not thought of that.

The best I can tell is the Fidelity used 100.3753 (appears to be the Avg of the H/L of the 6th) and Schwab used 100.42 (which is either the the opening or the close, they are the same, of the 7th).

With my 10 share trial, Fidelity added .044 Shr and Schwab added .0438 Shr. I would have had to trial at least 1000 shr to get enough resolution to examine their round-off processes. Doing $100K would put my holdings in disarray, so I'll pass on any further trialing.

The conclusion I drawn for myself at this point is the difference is pretty small and probably not worth chasing.
urban
Posts: 355
Joined: Wed Apr 14, 2021 12:36 am

Re: Considering Schwab

Post by urban »

VG also reinvested SGOV on 6/7/24 at the price $100.42/sh.

The last 2 months (May and June) Schwab was paying and reinvesting dividends for my bond ETFs without usual 1 day delay. Seems like Schwab is trying to stay competitive with other brokerages. Competition is good.
CuriousGeorgeTx
Posts: 459
Joined: Mon Dec 14, 2015 4:59 pm

Re: Considering Schwab

Post by CuriousGeorgeTx »

RetiredAL wrote: Sun Jun 09, 2024 3:25 pm The best I can tell is the Fidelity used 100.3753 (appears to be the Avg of the H/L of the 6th) and Schwab used 100.42 (which is either the the opening or the close, they are the same, of the 7th).
Are you sure about it being the opening or the close? I recalling digging a little bit into the price for my VT ETF dividend reinvestments in my Schwab IRA, and it was just a price at the time they made the transaction, like 10:30 in the morning. Since EFTs aren’t traded at the opening or closing prices (unlike mutual funds), this kind of makes sense, but the lack of transparency always troubled me a little.

I looked back at my Schwab IRA SGOV dividend reinvestment history, and as others have observed, something appears to have changed beginning in May:
Reinv Div. Reinvest Shares
March 7. Mar 8
Apr 5. Apr 8
May 7. May 7
Jun 7. Jun 7

We shall see later this month if it has changed for VT as well.
bling
Posts: 1483
Joined: Sat Jan 21, 2012 11:49 am

Re: Considering Schwab

Post by bling »

i've had a fidelity account for a while now and pretty familiar with it. i was part of the last wave of TDA accounts and finally, i have a schwab account. i gotta say....it's pretty underwhelming.

having schwab and fidelity side by side, i'd say the latter wins most bouts. the lack of cash management is very noticeable. if you plan on using the debit card (one of schwab's killer features), you have to take note that there's cash in the account, which means selling your MMF one day before to avoid margin interest. not an issue with fidelity.

both schwab and fidelity offer worldwide ATM reimbursements. schwab's card is slightly better since they will not charge exchange fees on purchases, but you shouldn't be using a debit card for purchases in the first place, so i don't see that as a real advantage.

schwab has a real bank so you get zelle, but that's only noteworthy if you need to send more than $500 per day over zelle, which is the limit for linking a debit card to zelle for non-supporting banks.

so what advantage is left? well, thinkorswim is an excellent platform, and is much better than anything fidelity has to offer. but for the average BH you won't really use it much.
Mardoc01
Posts: 206
Joined: Thu Aug 03, 2017 10:31 pm

Re: Considering Schwab

Post by Mardoc01 »

Mardoc01 wrote: Sun Jun 09, 2024 1:04 pm Didn’t Schwab grandfather their legacy clients to sweep into a mmf?…
Anybody aware of this ?
zero_coupon
Posts: 671
Joined: Sun Jun 05, 2022 5:26 am

Re: Considering Schwab

Post by zero_coupon »

Mardoc01 wrote: Mon Jun 10, 2024 2:07 pm
Mardoc01 wrote: Sun Jun 09, 2024 1:04 pm Didn’t Schwab grandfather their legacy clients to sweep into a mmf?…
Anybody aware of this ?
Yes, someone posted here confirming this for an old account. The individual was able, with some difficulty, to negotiate applying this to all accounts. Perhaps mentioned earlier in this thread?
Post Reply