I use both. I originally wanted to compare the two, but as they both have their advantages, I have found no reason to choose one over the other. The accounts are equal in that you can order free checks, use free billpay tools, free Visa debit cards, and both provide access to brokerage services and research tools.
There are also instances where one account has an advantage over the other.
Fidelity advantages over Schwab:
- While both accounts will reimburse you for ATM fees, Fidelity will do it within a couple of business days, while Schwab will reimburse at the end of a statement cycle. You get your money back regardless, but I can see how Fidelity's almost-immediate reimbursement may have an advantage.
- Fidelity only does a SP, whereas Schwab does a HP to open an account.
- As the Cash Management account is a hybrid between a brokerage account and a checking account, only need to open 1 account to take advantage of their checking and brokerage features. Schwab requires you open a separate brokerage account with the checking account (it comes as a package, and you cannot have the checking account without the brokerage account).
Schwab advantages over Fidelity:
- Schwab does not charge foreign transaction or currency conversion fees. You are only charged the US Dollar equivalent on purchases made in a foreign currency (based on the market exchange rate of the day). Fidelity charges the fee that Visa Inc. charges for foreign transactions, which is currently set at 1%. While the fee is small, I would prefer no fee at all.
- While Schwab Bank is not a full-service bank, they do have many of the products of a traditional bank. Schwab Bank offers mortgages and other types of loans. My understanding is that Fidelity does not have these types of services. However, both Schwab and Fidelity have life insurance products.
- Schwab Bank offers a savings account, if the customer so chooses, and the interest rates are higher (0.1% for checking and 0.14% for savings).
As I mentioned earlier, I like both, so I am perfectly fine with having multiple types of accounts.
