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Schwab High Yield Investor Checking Account Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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The Schwab Bank High Yield Investor Checking account offered by Charles Schwab Bank isn’t your average checking account. It’s an interest-bearing checking account that offers an added benefit for investors by automatically linking to their brokerage account. If you want the convenience of having your idle cash and invested assets all under one roof and are comfortable with not having any brick-and-mortar branches to visit, this product could be for you.

What is the Schwab Bank High Yield Investor Checking account?

The Schwab Bank High Yield Investor Checking account is an interest-bearing checking account that is linked to your Schwab One brokerage account, making it easy and convenient to invest otherwise idle cash.

When you open your High Yield Investor Checking account, a Schwab One brokerage account will also be opened for you. The accounts will have separate account numbers, but both can be viewed online with a single login. If you’re in the market for just a checking account to stash the cash you use for your everyday spending needs, opening a brokerage account alongside your checking account can seem like an unnecessary step, as the brokerage account’s main function is to trade stocks, options, bonds, mutual funds, ETFs and other financial products.

This product comes with attractive features that many traditional checking accounts offer — including no minimum balance requirements, no monthly service or ATM fees and a variable interest rate — as well as the unique feature of easy transfers to and from your linked brokerage account.

Here’s what you can expect to receive upon opening and funding a Schwab High Yield Investor Checking account:

  • 0.03% APY
  • Federal Deposit Insurance Corporation (FDIC) insurance
  • Free transfers to and from your linked brokerage account
  • Schwab Bank Visa Platinum debit card
  • Complimentary checks, deposit slips, mailing labels and pre-addressed, postage-paid envelopes

Schwab Bank High Yield Investor Checking account fees and minimums

The Schwab Bank High Yield Investor Checking account features the following fees and minimums:

Monthly service fee

$0

Minimum balance fee

$0

ATM fee

Unlimited ATM fee rebates

Foreign transaction fee

$0

While the Schwab One brokerage account also does not have any minimum balance requirements or monthly maintenance fees, other account fees may apply. For example, trades placed through a broker come with a service charge of $25.

Schwab High Yield Investor Checking account pros and cons

Pros

  • Unlimited ATM rebates: Where this account really shines is with its unlimited ATM fee rebates feature. While Schwab does not have its own network of ATMs, it allows its High Yield Investor customers to access any ATM and issues an unlimited number of ATM fee rebates for cash withdrawals — no matter how hefty the ATM fee is. ATM fees for cash withdrawals made worldwide are rebated at the end of the month.
  • Easy to invest idle cash: By having your checking account linked to your brokerage account, it makes it much more convenient to invest any idle cash.
  • Minimal fees: Schwab’s High Yield Investor Checking account boasts minimal fees compared to other checking accounts, specifically ones offered by other big banks.

Cons

  • Low interest rate: The account’s 0.03% APY pales in comparison to other high-yield checking accounts, some of which have rates that climb to over 5.00% APY.
  • No brick-and-mortar locations: For consumers who prefer having a physical location to visit, this account might not be for you. With no brick-and-mortar locations for Schwab Bank, your banking will be conducted solely online, which could be cumbersome for people who feel more comfortable depositing checks and cash in person.
  • Hard credit inquiry: When applying for a new account, Schwab Bank makes a hard credit inquiry. For people concerned about the effect this will have on their credit score, this could be a deterrent.

Who is the Schwab Bank High Yield Investor Checking account good for?

If you’re just looking for a liquid checking account that you can use for your everyday spending needs, the Schwab High Yield Investor Checking account is likely not for you. There are other checking accounts offering much higher interest rates without requiring you to link a brokerage account in order to open the account. Additionally, if your strategy is to let your extra cash sit in the Schwab High Yield Investor Checking account without initiating regular transfers to your Schwab One brokerage account, your money would grow at a considerably faster rate in a high-yield savings account, money market account or CD.

If you already are an investor and have a Schwab One brokerage account — or are looking for a checking account that provides easy and instant transfers to and from your brokerage account — the Schwab High Yield Investor Checking account is certainly worth exploring. It has many of the same, standout features that the best traditional checking accounts have, while also being one of the few checking accounts out there that provides instant access to your invested assets.

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Banks That Will Pay For Your Broken iPhone

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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Pretty Young Multiethnic Woman Holding Phone and Credit Card Using Laptop.

Buying a new iPhone 6? You might want to think twice before shelling out $99 for AppleCare protection.

That’s because several banks and credit unions offer credit cards with a little known perk called Cellular Telephone Protection coverage, which will reimburse you if your phone is damaged or even stolen.

It’s a leg up on AppleCare, which won’t cover you for theft. And it’s on top of warranty extensions or purchase protection your card might already offer.

MagnifyMoney.com reviewed the coverage of over 25 banks and credit unions that offer this feature, and here are the findings:

What do you need to do?

Just pay for your monthly cellular plan with the eligible credit card. Each month you do, you’ll be covered. You don’t need to buy your phone with the card, so any phone you have can get coverage as long as you start paying the monthly bill with your card.

How much does it cover?

It varies from $200 to $600 per incident, with Wells Fargo offering the most generous coverage at $600 per incident reimbursement:

Wells Fargo: $600
First Citizens Bank: $500
Hancock Bank: $250
Credit Union West: $250
Kinecta: $250
Purdue Federal Credit Union: $250
Quorum Credit Union: $250
Suntrust (Visa Signature only): $250
Community State Bank: $200
Energy Capital Credit Union: $200
Fidelity Bank and Trust: $200
Fifth Third: $200
Spirit of Alaska Credit Union: $200
University and Community Credit Union: $200
US Alliance Credit Union: $200
Aggieland Credit Union: $200
American Partners Credit Union: $200
Education Credit Union: $200
Friends and Family Credit Union – With Checking Account: $200
Greater Texas Federal Credit Union: $200
Hudson Valley Credit Union: $200
IBM Southeast Credit Union: $200
MCT Credit Union: $200
Scott Credit Union: $200
Tarrant County Credit Union: $200
UnitedSA Credit Union: $200

And you can do it for as many years as you’d like, unlike AppleCare which will only cover you for two years and ends completely after two incidents.You can request reimbursement twice per year, so for example with Wells Fargo you could get $1,200 covered each year.

What is the deductible?

It’s better than AppleCare, which charges you $79 per incident for damage.

Wells Fargo charges just $25 per claim. Most other banks and credit unions with the coverage charge $50, still better than AppleCare.

How does replacement work?

If your phone can’t be repaired, the insurance provider will pay for a replacement purchased directly from the store (in person or online) of your wireless carrier.

There is a catch: your phone might be more expensive than $600 when bought brand-new without a contract extension.

New iPhones run $649 to $800+ depending on features.

So, you might be on the hook for an extra $200 or $300 if you badly damage the phone in its early days.

But that’s a reasonable price to pay considering you’re getting the insurance at no upfront cost to you.

Insurance direct from your wireless provider often costs $50 per year or more, and it carries deductibles as high as $150 or more for more expensive phones.

If you’re someone who wants insurance on your phone, it’s probably worth opening up an account with a bank or credit union that offers superior protection.

Have questions? Get in touch via TwitterFacebook, email [email protected] or in the comment section below!

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How Overdraft Fees Silently Rip You Off

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How Overdraft Fees Silently Rip You Off

It’s Thursday, the day before payday. You only have $50 left in checking and have forgotten that your gym membership of $70 will be automatically debited from your account today. Normally, you’d transfer a little bit out of savings to cover the cost if you needed to, but you didn’t do it in time. The bank approved your gym’s charge and now your balance is negative $20.

Whoops, you’ve gone overdraft.

33% of Americans have gone overdraft in the last year

In a recent survey, MagnifyMoney discovered 33% of Americans have gone overdraft in the last year. If you haven’t yet, it is bound to happen at some point. Either we make a mistake, or we actually run out of money.

Going overdraft in the United States – even accidentally – is one of the most expensive ways to borrow money in the world.

  • Banks charge effective APRs > 1,000% – making them worse than payday lenders

  • Banks have purposefully made the system obscenely complex.

  • Banks regularly re-order transactions in the background, increasing the fees you pay and stacking the deck against you

The U.S. always wants to be #1…

Unfortunately, overdrafts in the US are the most expensive form of short-term borrowing I have seen in the world.  Yes – it is more expensive to borrow here than in the UK, Russia or Mexico! Banks made $32 billion last year in overdraft fees alone.  And, in our survey, borrowing $100 for 7 days could cost up to $300 in fees!

How do fees work?

In the example of the gym membership, the bank has 2 choices: approve the transaction or decline the transaction.

If they approve the transaction, then you go overdraft and will be charged an overdraft fee. The average fee is about $35 per incident.  You can be charged multiple times a day.  One of the worst examples is Citizens Bank, which charges $37 per incident, up to a shocking 7 incidents per day. I’ll save you whipping out the calculator, that’s $259 in fees for a single day!

When your account is overdrawn, the balance is negative. You have to bring the balance positive (by putting money into the account), or else you will be charged an extended overdraft fee.

At Bank of America, you would be charged another $35 if the account is negative for 5 days. And remember: you have to cover both the amount you borrowed and the fee.  In the case of the gym membership – you would have to pay the $20 you borrowed and the $35 fee in 5 days, otherwise you are charged another $35!

If the bank decides to decline the transaction, you still get charged a fee.  This fee is called an NSF fee aka non-sufficient-funds fee.  And, guess what?  The fee is still a shocking $35 per incident.

So: you are charged $35 if it is approved or declined.

Doesn’t the bank also mess with how my transactions are posted?

In a normal world, transactions that take place at 8AM will be deducted from your checking account at 8AM.  Unfortunately, the rules are stacked against you.  Rather than posting the transactions when they actually happened, a lot of banks post transactions when they wish they would have happened.

Nearly 50% of banks use what is called “high to low processing.”  They take all of your transactions from the day, and deduct them from your account from highest amount to lowest amount (and they do this at the end of the day).  That means you will go overdraft sooner, and you will pay more fees.

Imagine you have a balance of $50.  You have 2 transactions: a morning trip to Starbucks for $5, and then dinner for $55.  If the transactions were posted in order, then you would only have one overdraft transaction: the dinner for $55.

If the transactions were posted from high to low (and not in the order they happen), then you would have 2 overdraft transactions!  At an average bank, that would increase the fee from $35 to $70!

And that is perfectly legal.