New Schwab (FIA) Card - 2% Rewards

[MojaveMoon]

---

@Anonymous wrote:

I don't see how they could penalize you. However, it'd be a major PITA to set-up a brokerage, link it to a checking account, apply for the card, and then each month transfer your rewards to your primary bank/credit union.

I think the vast majority of the people taking advantage of the offer are looking to simplify their finances, and by offering a great, easy-to-use cash back credit card in combination with checking, savings and brokerage accounts, I think Schwab is going to dominate that market.

---

I agree with your thoughts. Here is my dilemma. I read in a discussion at FW that "Deposits for the Schwab Bank accounts are not accepted at any Charles Schwab & Co. branches.". And I believe that you can't deposit money via depositing a check at an ATM.

I don't want to want to have keep making trips to the post office to mail every single check.

So that means using my local bank or credit union as a middle man -- go to the bank or CU, deposit the check, then transfer the money to the Schwab account. In a mega thread on USAA at FW, several people had their accounts immediately closed by USAA when USAA arrived at the determination that USAA's checking account was being used as a funds hub .. a middle man. I'm worried about incurring that fate if all I'm ever using my local bank/CU for is processing the check so I can ACH it out of there. Plus it seems like in the process of trying to simplify my life this could be seen as introducing an additional step/complication.

What do you think ?

[Anonymous]

---

@MojaveMoon wrote:

---

@Anonymous wrote:

I don't see how they could penalize you. However, it'd be a major PITA to set-up a brokerage, link it to a checking account, apply for the card, and then each month transfer your rewards to your primary bank/credit union.

I think the vast majority of the people taking advantage of the offer are looking to simplify their finances, and by offering a great, easy-to-use cash back credit card in combination with checking, savings and brokerage accounts, I think Schwab is going to dominate that market.

---

I agree with your thoughts. Here is my dilemma. I read in a discussion at FW that "Deposits for the Schwab Bank accounts are not accepted at any Charles Schwab & Co. branches.". And I believe that you can't deposit money via depositing a check at an ATM.

I don't want to want to have keep making trips to the post office to mail every single check.

So that means using my local bank or credit union as a middle man -- go to the bank or CU, deposit the check, then transfer the money to the Schwab account. In a mega thread on USAA at FW, several people had their accounts immediately closed by USAA when USAA arrived at the determination that USAA's checking account was being used as a funds hub .. a middle man. I'm worried about incurring that fate if all I'm ever using my local bank/CU for is processing the check so I can ACH it out of there. Plus it seems like in the process of trying to simplify my life this could be seen as introducing an additional step/complication.

What do you think ?

---

 

I definitely understand where you're coming from, and there is a degree of sacrifice involved in having such accounts.

 

First of all, I'm pretty sure USAA would be the exception rather than the rule in closing accounts used as hubs. Financial institutions make lots of money off of you when you have deposits made into a checkin account with them even if only for a few days. As a Navy Federal employee, I can say with 100% certainty, we wouldn't do that.

 

Second of all, it's true you can't make deposits at branches for Schwab bank accounts, but I'm 90% sure you can make a deposit at one of their branches for your brokerage account. Also, Schwab and most other brokerage firms send you prepaid business mail envelops when you set-up an account with them so you can mail in your checks free of charge, just pop them in your mailbox.

 

Even taking the above into consideration, depositing paper checks seems to be the only drawback. And I feel like it only qualifies as a drawback if you receive several paper checks each month. I find it more convenient since I can just direct deposit my paycheck into my Schwab Bank account and if I ever have any checks to deposit, use my CU account as a hub, like you mentioned. At the end of the day, it's really about what's easiest for you 

[MojaveMoon]

---

@Anonymous wrote:
#1) I definitely understand where you're coming from, and there is a degree of sacrifice involved in having such accounts.

#2) First of all, I'm pretty sure USAA would be the exception rather than the rule in closing accounts used as hubs. Financial institutions make lots of money off of you when you have deposits made into a checkin account with them even if only for a few days. As a Navy Federal employee, I can say with 100% certainty, we wouldn't do that.

#3) Second of all, it's true you can't make deposits at branches for Schwab bank accounts, but I'm 90% sure you can make a deposit at one of their branches for your brokerage account. Also, Schwab and most other brokerage firms send you prepaid business mail envelops when you set-up an account with them so you can mail in your checks free of charge, just pop them in your mailbox.

#4) Even taking the above into consideration, depositing paper checks seems to be the only drawback. And I feel like it only qualifies as a drawback if you receive several paper checks each month. I find it more convenient since I can just direct deposit my paycheck into my Schwab Bank account and if I ever have any checks to deposit, use my CU account as a hub, like you mentioned. At the end of the day, it's really about what's easiest for you

---

Thank you, You've helped me tremendously! In mulling over my plans for down the road, two of the thing that appeal to me about the Schwab checking.

Regarding the Schwab free and unlimited ATM usage:
1a) For (some of) my everyday spending, cash is still a tool for me that helps me stay in control of my spending.
1b) Emergencies. no matter where i am, whether in a small town or in an unfamiliar city, I won't be tied down to one bank's ATMs or won't have to drive around hunting for a COOP CU ATM

Second, what I keep reading is how reliable, hassle-free, and fast Schwab's ACH transfers are -- I wouldn't be limited by the rules of a small credit union in my area (assuming that local CU even offers ACH transfers).

I wanted to be sure that I didn't do anything that would be taking advantage of anything or anybody (especially if I wind up opening an account with a local CU), and I also wanted to make certain ahead of time that my plans would not draw down upon me a Suspicious Activity Report. Your points #2 and #4 helped clarify things a lot for me, and your suggestion in #4 makes a lot of practical sense. (I'm glad you knew what I was talking about when I said "funds hub" and "middle man". I don't know the proper terminology and was borrowing the phrases I'd seen on FW)

May I ask you one more thing. Between having an account with a local CU and having the ATM benefits of the Schwab account, I don't think there'd be any need anymore to continue retaining my Wells Fargo checking account (I've been hanging on to it since there are lots of Wells Fargo branches and ATMs in Arizona, but I dislike everything else about Wells Fargo). But I'm wondering how long Schwab would be able to continue offering free unlimited ATM usage, and I was wondering how long they have so far been offering the free unlimited ATM usage -- that might help me predict how much longer this will be offered.

[Anonymous]

I may be very wrong, as this is only speculation, but based on what I've read about the High Interest Investor Checking account and Invest First Visa Signature credit card, they're both relationship products.

I don't think they'll take the free ATM withdrawals away, especially when they're one of the biggest features of the account. I'm sure they realize that with an online checking account like theirs, ATMs are the only way to get cash, so eliminating that feature would cause a lot of people to go someplace else. Besides, they have to provide you advance written notice when the terms of your account change, so if they eliminate free ATM reimbursements, which I highly doubt they will, you'll have plenty opportunity to move someplace else.

In the meantime, I absolutely wouldn't keep a checking account at Wells Fargo. They have awful rates, high fees and from what I've heard, below average customer service. You'd be much better-off to go with Citibank or Bank of America, or better yet, any credit union out there, if only for good customer service and not screwing you with fees. Again, personal preference.

I think you've got the right idea though. Just have a credit union checking account with a brick and mortar branch in case something goes south with Charles Schwab online checking and you can move yourself out of it at a moment's notice.

[MojaveMoon]

---

@Anonymous wrote:
Even taking the above into consideration, depositing paper checks seems to be the only drawback. And I feel like it only qualifies as a drawback if you receive several paper checks each month. I find it more convenient since I can just direct deposit my paycheck into my Schwab Bank account and if I ever have any checks to deposit, use my CU account as a hub, like you mentioned. At the end of the day, it's really about what's easiest for you

---

Thank you again for your thoughts in your previous post

May I ask you one last question about what I excerpted up above from an earlier post, and then I promise not to take up any more of your time ?

I was doing some further reading yesterday about Schwab's checking account and learned this:

"A 3 business day hold is placed on funds coming in via Schwab brokerage MoneyLink® . You will earn interest and be able to trade most stocks and mutual funds as soon as the money is deposited. Until the hold time has elapsed, you may not withdraw the funds or use incoming MoneyLink® funds to trade securities requiring cleared funds up front, such as options or penny stocks."

So, for when that occasional check comes in, suppose I drive over to my local credit union and deposit that check. My understanding is that it usually takes about 3 business days for a check to clear. Then I set up an ACH transfer of that money into my Schwab brokerage account (since Schwab doesn't yet offer the ability to ACH transfer online funds directly into the checking account). ACH transfers apparently usually take about 3 business days ? And there's this 3 business day hold by Schwab on funds coming in to the Schwab brokerage account.

So, we're talking about a total of around 10 days to move money into the Schwab account after depositing a check into my local credit union or bank ? Is there a way to cut down on this amount of time ?

Message Edited by MojaveMoon on 12-09-2008 05:07 AM

[Anonymous]

Just got my Schwab welcome kit in the mail today, along with a message confirming a link between my Schwab High Interest Investor Checking and my Navy Federal EveryDay Checking.

I found the information page that you quoted on the Schwab website and yes, it does appear that it takes up to 3 business days for a transfer to your brokerage account to process. If you link your High Interest Investor Checking with an outside account however, it takes from 0-1 business days if the transfer is initiated on the Schwab website. I just requested a transfer from my Navy Federal EveryDay Checking to my High Interest Investor Checking a few moments ago and it says it will be completed by tomorrow.

Here's the information I found on transfers that looks to be from the same place you got your information:

Between Schwab brokerage accounts and Schwab Bank High Yield Investor Checking accounts Online process:

--- 

One-time or regularly scheduled transfers. 0-1 business day 
Requests received prior to 4:00 p.m. PT (7:00 p.m. ET) will generally be processed the same day. After 4:00 p.m. PT, processing generally takes 1 business day. No charge. Between Schwab Bank High Yield Investor Checking accounts and outside accounts Call Schwab Bank at888-403-9000 to request a transfer. 

One-time or regularly scheduled transfers. 

Requires initial set-up. 1-2 business days 
Requests received prior to 3:00 p.m. PT (6:00 p.m. ET) will generally be processed the same day. After 3:00 p.m. PT, processing generally takes 1 business day. 

Funds coming in via Schwab Bank Electronic Funds Transfer service will be available on the 4th business day. You will earn interest as soon as the money is deposited. You may not withdraw funds until the hold time has elapsed.

So, it looks like transfers, like the one I just made, from an external checking to Schwab checking take about a day, and transfers from your checking to your brokerage can happen in less than a day, so the majority of the wait time is spent waiting for the check to clear.

---

I'm not sure where you saw that ACH transfers can't be made directly into the High Interest Investor Checking account. Let me know if you have any information that contradicts my findings.