Schwab High Yield Investor Checking Account Review

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Updated on Wednesday, April 1, 2020

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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