Fidelity mySmart Cash v. Schwab High Yield Checking

I'm currently debating moving my primary checking account - the two alternatives I am deciding between are the Schwab High Yield Checking and the Fidelity mySmart Cash account. While I'm not sure which account I'm going to go with yet, I decided to post the pros and cons (as I see them) of each for other people who may be unhappy with their current checking options.

Schwab High Yield Checking

The Schwab High Yield Checking is a relatively new offering from Schwab. The account is basically a standard FDIC insured free checking account, but offers more perks than your average local bank. The account offers no fees, zero minimum balance, ATM fee refunds, a variable APY now hovering around 3.01%, free checks, a free check card, and a free brokerage account.

Fidelity mySmart Cash

The Fidelity myCash account is similarly a fairly new offering from Fidelity. mySmart Cash is a cash management account that operates as a quasi-checking account. A client opens a mySmart cash account and links it to a current Fidelity offering (like a money market fund). The mySmart cash account has no minimum balance requirement, no fees, ATM fee reimbursement, free checks, and free self-funded overdraft protection. The client is free to withdraw funds at an ATM or write a check on the account regardless of the balance, Fidelity will then move the appropriate amount from the designated account to cover the balance if the mySmart cash accounthas insufficient funds.

Comparison

Outside of a few minor differences the offerings from Fidelity and Schwab are pretty similar. However, there are a few relatively major differences that may contribute to the decision for some people. First, Schwab currently offers a higher APY on its checking account. However, this is probably offset by the fact that the mySmart cash account can be set to automatically draw from a higher yielding account (like a money market or mutual fund). A second difference is that the Schwab account comes standard with a free brokerage account. If you aren't already set up with a brokerage account then this may be an advantage to you - especially since the brokerage account has no minimum balance or opening amount. Below I have made a quick chart to show the features of both accounts, you'll see that they are pretty similar. I have a feeling that for most people the decision to chose one of these accounts would be based on whether they currently have a Fidelity or Schwab holdings already.


Do you find either of these accounts compelling? Do you already have one? Let us know how you like it.

Link: Schwab High Yield Checking

Link: Fidelity mySmart Cash

ATM Fee Hikes On Horizon

As consumer banks look to juice returns during a down period for new loans and mortgages be on the watch for rising ATM fees. In certain areas of the country JP Morgan, Bank of America and Wachovia have started charging $3 for non-account holders. Add that to the $1 or more that many banks like Chase already charge consumers themselves for the use of ATM’s not natively owned by the bank and consumers are getting a raw deal. You may be getting charged up to 20% of your withdrawal if you are making a withdrawal of $20 for example.

The average ATM fee today is $1.78, but five years ago it was about $1 at a bank where you didn’t have an account. My response, switch to a bank that refunds ATM fees that other institutions charge…. or if that isn’t a practical option for you use a point of sale cash back option – there are Walgreens and Wal-marts everywhere and a pack of gum costs a lot less than a $4 ATM fee.

If you are in the market for a checking account that has ATM refunds, some possibilities with decent interest are

Schwab High Yield Checking: 3.21% APY Variable with no min.

E*Trade: 3.60% APY Variable with $5,000 min.

Readers, do you have other suggestions? Comments?

Link to story @ ABC News

Image: wrestlingentropy @ Flickr

Schwab Offers High Yield Checking Account

Schwab has thrown its hat into the high interest checking ring recently. For those of you with Schwab brokerage accounts their "Schwab Bank High Yield Investor Checking" may be a convenient addition to your portfolio. A quick look at the account's stats show the following:

Rate: 4% variable APY.
Min: No account minimum.
Fees: No service charges or fees.
ATM: Unlimited ATM fee reimbursement.
FDIC: FDIC insurance up to $100,000.

I think it looks like the high-yield checking is a solid offering from Schwab. For starters, it beats the Electric Orange account from ING in terms of interest rates and features. Additionally, the Schwab money market is paying 4.32% (7-day avg as of 1-20-08), which means that if you give up .32% interest you can gain FDIC insurance and no minimum. A checking account isn't a great place to stash money in terms of investment opportunities, but if you have short term cash or carry a larger than average checking account balance it might be a good thing to look into.

Does a high yield checking account have a place in your portfolio, do you use a money market account with check writing, or just a plain old checking account?

Image: liewcf @ Flickr