topic Re: Banking for financial relationship? in Personal Finance

Banking for financial relationship?

Anonymous — Tue, 25 Feb 2020 17:58:42 GMT

Hello,

Currently I bank with fifth third. I have one CC through them secured, 2 CC through capital one, and all my checking and savings is with fifth third currently.

My question is. I plan to open cards with chase and possibly a home loan eventually (or with another bank not fifth third). Should I look into banking with a different establishment to begin a financial relationship with the institution I plan to open CC or home loan with? Or should I leave my banking with fifth third and not worry about it?

thank you.

Re: Banking for financial relationship?

LakeLife — Tue, 25 Feb 2020 18:31:06 GMT

For me personally, I think it's a good policy to start and maintain relationships with at least a few financial institutions. The old saying "don't keep all your eggs in one basket" comes to mind. I recently opened a savings account if NFCU just for the purpose of beginning a relationship with them. Their savings accounts are free, so there's no service fee.

I also have checking with M&T and Wells Fargo which are free due to allotments I send them every two weeks. I use them to pay the same bill every month. My Chase checking and savings are my main daily drivers.

Re: Banking for financial relationship?

pinkandgrey — Tue, 25 Feb 2020 18:27:36 GMT

Getting in with Chase wouldn't be a bad idea if you're able to do so. Relationships often help (not ALWAYS, of course) when it comes to future approvals.

Good luck!

Re: Banking for financial relationship?

Anonymous — Tue, 25 Feb 2020 18:28:04 GMT

Im considering doing NFCU. Had them while I was in the corps. But no longer active duty or retired. Does that matter?

Re: Banking for financial relationship?

pinkandgrey — Tue, 25 Feb 2020 18:31:20 GMT

@Anonymous wrote:
Im considering doing NFCU. Had them while I was in the corps. But no longer active duty or retired. Does that matter?

Lots of people around here love NFCU. I assume you're still eligible, so if you can, that would be a good way to go.

Re: Banking for financial relationship?

LakeLife — Tue, 25 Feb 2020 18:32:01 GMT

@Anonymous wrote:
Im considering doing NFCU. Had them while I was in the corps. But no longer active duty or retired. Does that matter?

Being a veteran qualifies you for an account. They do it automatically online. They did ask to verify my identity by sending them a W-2 and copy of my DL.

Re: Banking for financial relationship?

Remedios — Tue, 25 Feb 2020 20:30:40 GMT

The level of "relating" to the lender is directly proportional to the amount of the money in the bank.

Opening an account and putting some change in it leaves them underwhelmed, and in most cases, it's completely unnecessary unless approval is conditioned by having an existing relationship such as US Bank with AR criteria.

I'm not interested in having DDA account with every lender that has a card I'm interested in. If my CR and income are displeasing to them, me putting a few hundred wont change that by much.

Re: Banking for financial relationship?

KLEXH25 — Wed, 26 Feb 2020 03:52:17 GMT

If you think you can benefit more from another bank's financial products, then it makes sense. If you're happy with your current bank, then I don't think it's necessary unless you have a good chunk of change you can throw at the new bank. I stayed with Wells Fargo for far longer than I should have. I thought it would look good if I showed a long relationship with them, but they never offered me anything better that I couldn't get from another bank, so I left. Plus I hated their business practices.

Re: Banking for financial relationship?

iced — Wed, 26 Feb 2020 13:17:05 GMT

@pinkandgrey wrote:
Getting in with Chase wouldn't be a bad idea if you're able to do so. Relationships often help (not ALWAYS, of course) when it comes to future approvals.

Good luck!

I would actually disagree with this and flip it around. Banking relationships -- particularly of the small amounts that the typical person is going to be placing with the bank -- rarely help with "getting in" on other cards. It might allow for the occasional bypass of 5/24, but if you don't qualify for the card on the merits of your credit report or internal data they already have on you, having a checking or savings account isn't going to change that.

If you want to put money in a bank like Chase because it's going to result in higher returns or better access to your money, by all means do it. If you're considering taking a lower interest rate or other disadvantage at the prospect of getting a Sapphire or some other card a little easier, don't bother unless you plan on moving hundreds of thousands of dollars or more over. And in that latter case, don't bother either because the lost opportunity cost on half a million dollars is far greater than any value in getting a credit card with a Chase logo on it.

Re: Banking for financial relationship?

Green456 — Wed, 26 Feb 2020 15:42:12 GMT

@Anonymous wrote:
Hello,

Currently I bank with fifth third. I have one CC through them secured, 2 CC through capital one, and all my checking and savings is with fifth third currently.

My question is. I plan to open cards with chase and possibly a home loan eventually (or with another bank not fifth third). Should I look into banking with a different establishment to begin a financial relationship with the institution I plan to open CC or home loan with? Or should I leave my banking with fifth third and not worry about it?

thank you.

I never bank for relationship. Most banks don't care. The only exception seems to be the US Bank. So I will be redirecting small portion of my DD there as I want to Churn their credit cards

Re: Banking for financial relationship?

Anonymous — Wed, 26 Feb 2020 15:46:23 GMT

Basically,

My bank has no credit cards or loans Im interested in so I've decided to switch banks. All my assets and direct deposit (which is only 50k a year). So I'm trying to find out if holding an account with them could actually help me a little. I decided to go with NFCU just because all the amazing things I've heard about them.

Re: Banking for financial relationship?

Green456 — Wed, 26 Feb 2020 15:46:35 GMT

@iced wrote:
@pinkandgrey wrote:
Getting in with Chase wouldn't be a bad idea if you're able to do so. Relationships often help (not ALWAYS, of course) when it comes to future approvals.

Good luck!
I would actually disagree with this and flip it around. Banking relationships -- particularly of the small amounts that the typical person is going to be placing with the bank -- rarely help with "getting in" on other cards. It might allow for the occasional bypass of 5/24, but if you don't qualify for the card on the merits of your credit report or internal data they already have on you, having a checking or savings account isn't going to change that.

If you want to put money in a bank like Chase because it's going to result in higher returns or better access to your money, by all means do it. If you're considering taking a lower interest rate or other disadvantage at the prospect of getting a Sapphire or some other card a little easier, don't bother unless you plan on moving hundreds of thousands of dollars or more over. And in that latter case, don't bother either because the lost opportunity cost on half a million dollars is far greater than any value in getting a credit card with a Chase logo on it.

They have YouInvest, a brokerage account, where you can move your IRA, to establish "relationship." If you become their private client it may make a difference. And of course I don't think you will be loosing anything more than what you would loose at Fidelity or other brokerages. So you really don't need to put $100k in the savings account. You really shouldn't have that much money in high yield savings either as you loose about 1% per year after taxes and inflation.

Re: Banking for financial relationship?

iced — Wed, 26 Feb 2020 16:17:39 GMT

@Green456 wrote:
They have YouInvest, a brokerage account, where you can move your IRA, to establish "relationship." If you become their private client it may make a difference. And of course I don't think you will be loosing anything more than what you would loose at Fidelity or other brokerages. So you really don't need to put $100k in the savings account. You really shouldn't have that much money in high yield savings either as you loose about 1% per year after taxes and inflation.

I'm including investment vehicles via JPM, such as rolling an IRA over. Still a poor return IMO:

1. Doing a rollover from one brokerage to another is rarely free. If it costs me $80 in fees to roll a $500,000 retirement account from one brokerage to another, I'm already at an $80 disadvantage. This also applies to standard brokerages with after-tax funds.

2. Why would I move my money from Fidelity to JPMC (including Youinvest) when I have the same or better options at Fidelity? It's not going to suddenly qualify me for a card I'm not already qualified for, so why bother?

3. If I do this, I'm starting to once again have my money fragmented across multiple brokerages. Some people may be fine with that; I personally am getting tired of it. I just spent the last year consolidating multiple accounts across 5 brokerages down to 3 for easier access and management (eventually getting to 1), so I'm not about to start undoing that and having a quarter million here, a half million there for the placebo effect of having a relationship with banks. Same as point 2 above, what's to be gained here by throwing some money in Chase?

4. The bar for the real private client is $10 million at JPMC, though I guess if one wanted to, they could move a quarter million over for the $2,000 SUB with CPC. I do wonder why a bank needs to offer a SUB to entice clients over, though.

My point still stands. If moving your money results in a net gain in returns, by all means do it. If you're going to take even a small hit to try to boost your chances at getting a card, it's not worth it. That is, there is no significant boost or bonus to simply having money with most banks in terms of their card offerings. A Chase isn't suddenly going to be like "your profile concerned us before so we didn't offer you anything, but now that we see you have $250,000 in assets with us, let us pre-qualify for you for all of our cards". If you have the assets to qualify for CPC or JPM's private client, you have already demonstrated some level of fiscal saving and planning and likely already qualify for their cards and loans, with or without having that money actually parked in their accounts.

Re: Banking for financial relationship?

Green456 — Wed, 26 Feb 2020 20:01:24 GMT

@iced wrote:
@Green456 wrote:
They have YouInvest, a brokerage account, where you can move your IRA, to establish "relationship." If you become their private client it may make a difference. And of course I don't think you will be loosing anything more than what you would loose at Fidelity or other brokerages. So you really don't need to put $100k in the savings account. You really shouldn't have that much money in high yield savings either as you loose about 1% per year after taxes and inflation.
I'm including investment vehicles via JPM, such as rolling an IRA over. Still a poor return IMO:

1. Doing a rollover from one brokerage to another is rarely free. If it costs me $80 in fees to roll a $500,000 retirement account from one brokerage to another, I'm already at an $80 disadvantage. This also applies to standard brokerages with after-tax funds.

2. Why would I move my money from Fidelity to JPMC (including Youinvest) when I have the same or better options at Fidelity? It's not going to suddenly qualify me for a card I'm not already qualified for, so why bother?

3. If I do this, I'm starting to once again have my money fragmented across multiple brokerages. Some people may be fine with that; I personally am getting tired of it. I just spent the last year consolidating multiple accounts across 5 brokerages down to 3 for easier access and management (eventually getting to 1), so I'm not about to start undoing that and having a quarter million here, a half million there for the placebo effect of having a relationship with banks. Same as point 2 above, what's to be gained here by throwing some money in Chase?

4. The bar for the real private client is $10 million at JPMC, though I guess if one wanted to, they could move a quarter million over for the $2,000 SUB with CPC. I do wonder why a bank needs to offer a SUB to entice clients over, though.

My point still stands. If moving your money results in a net gain in returns, by all means do it. If you're going to take even a small hit to try to boost your chances at getting a card, it's not worth it. That is, there is no significant boost or bonus to simply having money with most banks in terms of their card offerings. A Chase isn't suddenly going to be like "your profile concerned us before so we didn't offer you anything, but now that we see you have $250,000 in assets with us, let us pre-qualify for you for all of our cards". If you have the assets to qualify for CPC or JPM's private client, you have already demonstrated some level of fiscal saving and planning and likely already qualify for their cards and loans, with or without having that money actually parked in their accounts.

Most brorkerages will cover closure fees from the other party that you are transferring from. So you would definitely not loose $80. Furthermore there is no reason to be split between 4-6 brokerage services. You can just transfer everything to one location and develop "relationship" with them. Also I don't know what investments you have but for me, I invest in total US stock market ETF and total US bond market ETF. Those can be pretty much obtained anywhere. Again this is personal issue. It is true that some mutual funds are exclusive.

Re: Banking for financial relationship?

iced — Wed, 26 Feb 2020 20:05:11 GMT

@Green456 wrote:
Most brorkerages will cover closure fees from the other party that you are transferring from. So you would definitely not loose $80. Furthermore there is no reason to be split between 4-6 brokerage services. You can just transfer everything to one location and develop "relationship" with them. Also I don't know what investments you have but for me, I invest in total US stock market ETF and total US bond market ETF. Those can be pretty much obtained anywhere. Again this is personal issue. It is true that some mutual funds are exclusive.

I'm still not hearing a compelling reason to move other than "relationship", which is not a thing. If there's nothing to be gained from moving assets other than false warm-fuzzies that a bank will like you more, there's nothing to be gained.