Advice on future credit and setting up payment split

[JoanFinancial]

Hello everyone,

First off, thank you all as this forum has changed my life over the last 5 years. I went from 500 credit score in debt to good 690-700+ CS and new career. I am not a banker and doing very well and a lot is because of what I have learned about credit and I help my clients to qualify.

My question is about getting one more credit card and asset account as well as best way to approach my goal. I want these accounts specifically to simplify my savings/investment and accomplish short and long term goals. short term is buying a home so I am saving money but dont want it just sitting, I would like it working for me. Long term goals are have emergency savings and ease of investment/retirement.

I have recently switched to fidelity and have a 401k and a brokerage with them. I saw that they have the signature credit card which has very nice cash back rewards which would be nice since currently I am using Capital One Quicksilver. I want to switch to better rewards because as we know the CLI on Capital One is not ideal and I want to switch my general cash back to another card and the Fidelity card would be nice. I also want advice on what would be the best type of account to store my savings as I dont want everything in a brokerage and traditional savings and high yield savings have such a low yield that I know there is a better account to have better returns without too many withdrawel restrictions or Maturity dates. I dont plan to withdraw much from this account but I dont want everything locked in case of emergency or ability to invest on the fly.

Long term goals are retirement and other investments. I make decent money and have very low debts but I am getting older and have not set myself up well with savings and investment. I want the versatility with the accounts so I can have good yield on savings and the ability to invest. I have the plan for large real estate investments, 401k, low/high rish brokerage, and small business. 

I would like advice on which accounts would be best for the yield, which card would have highest general reward (cash back, investment) and ease off using all in tandem. Fidelity does have some form of cash management account and the cash back card so that seems very easy. You all have gotten me to where I am now and your knowledge of institutions and accounts is invaluable. 

I appreciate any advice and insight on how to approach my goal.

[SouthJamaica]

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@JoanFinancial wrote:

Hello everyone,

First off, thank you all as this forum has changed my life over the last 5 years. I went from 500 credit score in debt to good 690-700+ CS and new career. I am not a banker and doing very well and a lot is because of what I have learned about credit and I help my clients to qualify.

My question is about getting one more credit card and asset account as well as best way to approach my goal. I want these accounts specifically to simplify my savings/investment and accomplish short and long term goals. short term is buying a home so I am saving money but dont want it just sitting, I would like it working for me. Long term goals are have emergency savings and ease of investment/retirement.

I have recently switched to fidelity and have a 401k and a brokerage with them. I saw that they have the signature credit card which has very nice cash back rewards which would be nice since currently I am using Capital One Quicksilver. I want to switch to better rewards because as we know the CLI on Capital One is not ideal and I want to switch my general cash back to another card and the Fidelity card would be nice. I also want advice on what would be the best type of account to store my savings as I dont want everything in a brokerage and traditional savings and high yield savings have such a low yield that I know there is a better account to have better returns without too many withdrawel restrictions or Maturity dates. I dont plan to withdraw much from this account but I dont want everything locked in case of emergency or ability to invest on the fly.

Long term goals are retirement and other investments. I make decent money and have very low debts but I am getting older and have not set myself up well with savings and investment. I want the versatility with the accounts so I can have good yield on savings and the ability to invest. I have the plan for large real estate investments, 401k, low/high rish brokerage, and small business. 

I would like advice on which accounts would be best for the yield, which card would have highest general reward (cash back, investment) and ease off using all in tandem. Fidelity does have some form of cash management account and the cash back card so that seems very easy. You all have gotten me to where I am now and your knowledge of institutions and accounts is invaluable. 

I appreciate any advice and insight on how to approach my goal.

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IMHO there are no good savings yields around these days, but the best ones are in credit unions. 

[JoanFinancial]

I have been noticing. Best I can see is .5 apy in a couple money markets. I didn't know if there was anything better.

The Fidelity signature card looks good too for the ease of use on rewards. I just want a good holding account and main card to start. I have fixed my credit and I'm going to buy a home next year so I dont want to get multiple cards or have all my assets in my brokerage. 

I'm open to alternatives too, im just too green.

[SouthJamaica]

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@JoanFinancial wrote:

I have been noticing. Best I can see is .5 apy in a couple money markets. I didn't know if there was anything better.

The Fidelity signature card looks good too for the ease of use on rewards. I just want a good holding account and main card to start. I have fixed my credit and I'm going to buy a home next year so I dont want to get multiple cards or have all my assets in my brokerage. 

I'm open to alternatives too, im just too green.

---

The thing is you're looking for simplicity.  If you want to forego simplicity there are much better deals.  E.g. DCU has a savings account that gives you 6% on the first $1000 but nothing special after that; Hanscom has a savings account where you have to make periodic contributions through the year, and get 2% or more interest; Affinity has a savings account where you get 2% on the first $2500, 1% on the next $2500; Evansville Teachers FCU offers a checking account with 3% interest if you're willing to use a debit card for some purchases each month.  There are all kinds of deals like this, but  you'd be giving up the simplicity idea.

As far as regular savings the highest simple ones are in that .55% area right now. E.g. Alliant CU.

[Anonymalous]

Depends on a lot of things. If you're looking for a one-and-done card, any of the 2% cards are good options, and with a Fidelity account you have a good redemption option. And with only a 1% foreign transaction fee, you even get net benefits when traveling. The cash back percentage also increases if you have significant assets with Fidelity, but those assets have to be under active management, which won't appeal to everyone.

You're right that savings accounts provide terrible returns right now. Which is okay, because you're planning on using it as an emergency fund, and ease of access is more important than beating inflation. But you do want the best rate you can find, which will typically mean choosing between credit unions and the online-only banks. Aim for about 0.5%, though if you plan to keep a relatively small amount in savings (a couple thousand), there are a couple options that can get you much higher rates, in the 1.75-6% range (Connexus, Consumer's, DCU, many "kasasa" checking accounts, etc.). Just be aware they to have high activity requirements and low caps, so they're probably not be worth the nuisance since you value simplicity. Since you plan on mostly leaving the money alone, consider money market accounts. They have good rates and and you can write checks, but come with limited transactions per month a la savings accounts (6, though currently waived thanks to the pandemic/Federal Reserve).

Another concern should be accessibility. Depending on your preferences and situation, this might be access to a local branch (either directly, or via another credit union that's part of the Co-Op network), or it might be the ability to move around decent chunks of money electronically. Sounds like the lattern is a concern for you, so check their funds transfer limits, from ATM withdrawals (typically under $1000), to Zelle and ACH transfers (many credit unions and even some very large banks have ACH caps below $10,000, which can make things difficult if you have a decent amount of assets), and wire transfer limits/fees. There are typically per transaction, daily, and 30 day limits. If that's a concern, one bank with very high ACH/wire transfer limits is Ally. The Fidelity cash management account might also be worth considering. It's effectively a checking account with free withdrawals from any ATM, high limits, and if you have lot of money it uses a trick to get 5x the normal FDIC insurance limit, though the interest rate is dismal.