The Schwab Bank High Yield Investor Checking account offered by Charles Schwab Bank isn’t your average checking account. In fact, it’s a checking account designed exclusively for investors. If you want the convenience of having your idle cash and invested assets all under one roof, 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.
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. 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.
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
How is the High Yield Investor Checking account different from other checking accounts?
In most cases, checking accounts do not require you to open another linked account in which funds will flow to and from. The Schwab High Yield Investor Checking account, however, is only available as a linked account with the Schwab One brokerage account.
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. The brokerage account’s main function is to trade stocks, options, bonds, mutual funds, ETFs and other financial products.
However, it is worth noting that the Schwab One brokerage account does not have any minimum balance requirements or requirements to fund the account, making it relatively accessible and easy to open.
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
Minimum balance fee
Unlimited ATM fee rebates
Foreign transaction fee
It’s worth noting that 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
- 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.
- Unlimited ATM rebates: This is a valuable feature and could save you a significant amount of money over time.
- 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.
- Unnecessary complexity: The requirement of having a Schwab One brokerage account could be viewed as an added hoop to jump through for those simply looking for a traditional checking account product.
- Non-sufficient funds fee: Watch out for the account’s non-sufficient funds (NSF) fee of $25, up to $100 maximum per day, if you don’t have enough money in your account to cover a transaction. Still, this is less than the average NSF fee of $30.50.
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.