Charles Schwab is widely regarded as one of the best traditional investment options, but
they also offer two different bank accounts with some pretty unique features that I've
never seen before.
Alright, let's jump right into it.
What is going on everyone I hope you're all having a fantastic day.
So right now, Charles Schwab offers what they call a high yield investor checking account
and a high yield investor savings account.
There are also a few other niche account options that we'll talk about later in the video but
as the names suggest, these accounts are meant to seamlessly integrate with the popular Charles
Schwab investing platform which we talked about at length in previous videos.
So that begs the question…who is this bank account for?
Starting with the Schwab bank high yield investor checking account, this has no monthly fees
no minimum balance requirements, and a flat APY of 0.25% on all balances.
Remember that this is a checking account so earning any interest and all is great and
many of Schwab's national competition has different balance tiers with higher account
balances earning a higher APY so I do like the fact that it's a flat APY across the board
for all account balances.
Now Charles Schwab claims that there are no fees and for the most part that is true but
if you read the fine print, their version of overdraft protection only applies if you
have your Charles Schwab checking, savings, and brokerage accounts linked together in
order to cover that overdraft.
The Schwab checking account does come with the brokerage account and they're meant to
work together which we'll talk about in a second but if you do not opt to take advantage
of all these features then there is a $25 non-sufficient funds fee per transaction so
be sure to keep that in mind.
There are also no foreign transaction fees which is great if you frequently travel internationally
and unlimited ATM fee reimbursements worldwide.
Let me repeat that to make sure you heard me.
Unlimited ATM fee reimbursements worldwide.
That means that no matter where you decide to withdraw cash around the world, not only
is Schwab not going to charge you with a fee but they will reimburse any and all fees that
the ATM provider may charge you.
Personally, I have only ever seen this one other time with my Novo business banking account
and I absolutely love that feature and use it all the time but I've never personally
seen this with an individual bank account so that is probably the best feature of this
entire account.
Speaking of withdrawing and using your cash this account does come with the Schwab bank
visa platinum debit card.
Nothing too special here but this is going to offer you contactless payment the ability
to add this to your virtual wallets to pay with your phone and the ability to view and
set transaction alerts using the Schwab app, lock and unlock your card from your phone,
two-factor authentication, travel alerts, and all of the card security and benefits
that come with the visa zero liability protection.
Moving on from there we have the Schwab bank high yield investor savings account which
again isn't anything too flashy but offers you 0.28% APY, the same no-fee structure as
the checking account, and of course unlimited ATM fee reimbursements worldwide.
Again 0.28% is nothing to write home about but what I will say is that number one that
is still 28 times better than competition like chase and Wells Fargo who pay just 0.01%
and as we'll talk about in a second, this is meant to be used in conjunction with your
Schwab brokerage accounts meaning the target audience here is likely investing a majority
of their cash anyways and is not that concerned about the interest rate they're earning on
the little cash they have sitting on the sidelines.
Now regardless of which account options or combination of accounts you go with, every
Schwab account and be managed online and from the Schwab mobile app, and while I'm a huge
fan of being able to track multiple financial accounts under one application, the Schwab
mobile app leaves a lot to be desired.
Don't get me wrong it does everything you could possibly need including managing balances
viewing transactions depositing checks remotely, transferring money and all of that.
It even has a news and education section where you can learn about what's going on in the
market and the financial industry but the overall design just seems a little bit clunky
and oversimplified in my opinion but remember that that's coming from someone who loves
the sleek and modern design of many of today's most popular financial technology companies.
So, if you're coming from something like Chase or Wells Fargo this app is going to work great
but if you're coming from something like SoFi or Chime then you'll definitely be a bit underwhelmed.
I will also mention at this point that obviously all of the money in your account is FDIC insured
up to $250,000 but perhaps the best feature that we have not yet talked about is Schwab's
partnership with Zelle.
Zelle is a third-party peer-to-peer payment provider similar to Venmo or cash app and
over the past few years, Zelle has strategically partnered with a number of the largest banks
to make it easier for you to send and receive money to and from basically any bank account
in the United States.
In fact, this is actually a feature that a lot of modern fintech companies like SoFi
do not currently have and something that a lot of users have been asking for from those
platforms for a very long time.
I love this integration and it's as easy as selecting transfers and payments within the
Schwab app, selecting send money with Zelle and again you can then send money to almost
any U.S. bank account right from your smartphone in a safe and efficient way.
Alright, we’ve still got to talk about the really unique way that these accounts integrate
with your Schwab brokerage account but before we get to that there's one other curveball
account option that I'm a pretty big fan of with Schwab currently.
This is actually under the investment section of Schwab's website since it's technically
a fixed income vehicle but that would be the certificates of deposit.
Now Schwab themselves does not currently offer CD's but they're able to source the best rates
across the industry and they're definitely doing a great job because right now just a
one to three month CD is paying 2.42% and a 10 to 18 month CD is paying 3.2%.
To put that in perspective in order to get 3% or more from a lot of competitors right
now you’re looking at locking your money in a CD for five years so the fact that you
can get such a high Guaranteed Rate of return by only locking your money away in this CD
for a few months definitely gets a thumbs up from me.
They do also offer callable or no-penalty CDs which just means that you can terminate
the CD early but if you're gonna do that I would just find a high-yield checking account
and call it a day because usually the returns are lower with callable CDs and you also run
the risk that the issuer of this CD could call it early if interest rates suddenly dropped.
I get that a certificate of deposit isn't the most exciting thing in the world but a
Guaranteed Rate of return of over 3% is definitely worth mentioning.
Alright so as I mentioned earlier your Schwab high yield investor bank accounts comes with
a standard Schwab brokerage account and while the investing side of Schwab is not the topic
of today's video, needless to say, their investment options are abundant.
Each of these accounts is going to have its own unique account number but can it be managed
from the same Schwab mobile app giving you a convenient way to transfer funds between
accounts and once again set up overdraft protection using your brokerage account.
So if you're looking for a robust investing tool with every investment option that you
could possibly need that also has a decent banking platform attached to it then this
is likely the best option on the market today.
Before we wrap this one up though we, of course, have to talk about Schwab's customer service
which is actually really decent offering phone and chat support with their phone service
being available seven days per week.
Plus while they are few and far between, Charles Schwab does have over 360 physical branches
so depending on where you live if you do need to go into a brick-and-mortar bank for whatever
reason then at least this is an option as well.
We've covered a lot of ground fairly quickly but the final question still remains…who
is this account for?
Well, looking at the banking features on their own, there's really nothing too crazy here
and while I do love the worldwide ATM fee reimbursement feature, that on its own is
not enough to convince me to get this account.
If you're looking for that hybrid banking model without being fully online then personally
I'd say that the Capital 360 accounts are a better option however if you already have
a Charles Schwab investing account or you are looking to open a more traditional investment
account then Charles Schwab beats out much of the competition.
Capital One doesn't offer any kind of investing, wells fargo's investing platform is literal
trash, and chase of course has JP Morgan Chase investments but again the integration between
the chase banking platform and JP Morgan is not as seamless as what Charles Schwab is
offering in my opinion.
So if you're looking for that one-stop solution for investing and banking but you don't want
to be fully online with a fintech company like SoFi then I'd say these options from
Charles Schwab are your best bet.
But as always that is just my opinion so I'd love to know what you think of the Schwab
banking accounts down in the comment section below and what your favorite feature currently
is.
Be sure to check out some of my favorite financial tools using those links down below the like
button and as always thank you so much for your time I really do appreciate it so much.
Take it easy and I'll see you in the next one!