Interest on Checking Accounts?

[Patrick]

Is anyone here getting interest on their checking account funds? If so, what rate are you receiving and which bank are you using?

Thanks,

Patrick

 

[Spanky]

E*Trade, 4.5% yield.

 

[SC]

3.45%, http://www.bankofinternet.com/drates/?tab=2

If you're over 50, it's 3.65%.

 

[mathjak107]

fidelity investments almost 5% on my checking/core

 

[Texas Proud]

Regular bank.... was .20, but got an offer to upgrad the account and get a free safety deposit box etc... now .75...

since I work for the bank... they want you to have an account to deposit your paycheck...

 

[Mr._johngalt]

All of my checking accounts are on the brink of OD as I keep so little money there. I see my main personal checking account pays 0.15%. I am sure with a little effort I could get at least 5% on most all monies right up until the checks hit. Never seemed worth the time, but this thread may get me
to check into it.

JG

 

[azanon]

USAA checking, pays a small rate, not sure what it is though.

I wonder if some of the ones above are confusing a checking account with essentially a money market account with check writing privaledges. The main difference is that the former has no minimum amount the check can be written for.

 

[maddythebeagle]

right...seems like you need to clarify....some money market checking accounts only allow a few checks a month and 6 total transactions a month (checks and transfers).....I have a free checking account and do a lot of bill pay and transfer out the excess to one of the high yield savings account (hsbc and eloan right now).

 

[bosco]

fidelity investments almost 5% on my checking/core

which fund is your core? Cash Reserves is paying 5%, but my core account is something else that they don't publish the rates for. I think it's closer to 3%, which is why I keep the core to a minimum an sweep the rest into cash reserves.

 

[Cut-Throat]

I keep my Cash at Vanguard Money Market fund. Pays around 5%. I rarely write checks, but can from this account if greater than $250. Pay everything with Credit Card and Electronic Pay Credit Card from Checking Account.

Cash is at Emigrant direct also and Pays around 5%. I transfer money from here when I need it to a checking account that pays little interest. But I only keep a few bucks in it.

 

[audreyh1]

I think you can elect Cash Reserves to be your core. (Fidelity)

I have a tax-free core in my brokerage account, and that's close to the 3% range. Could that be your case?

Audrey

 

[bosco]

I think you can elect Cash Reserves to be your core. (Fidelity)

I have a tax-free core in my brokerage account, and that's close to the 3% range. Could that be your case?

Audrey

according to their website (at least when I opened the account), you can only elect Cash Reserves as the core in a tax-deferred account. Not the account I want to be writing checks out of.

 

[youbet]

right...seems like you need to clarify....some money market checking accounts only allow a few checks a month and 6 total transactions a month (checks and transfers).....I have a free checking account and do a lot of bill pay and transfer out the excess to one of the high yield savings account (hsbc and eloan right now).

Schwab allows unlimited checks of any amount to be written against the sweep MM in your brokerage account. Currently I'm using the tax free MM and will switch to taxed in January. Typical, competitive rates for either.

Strategy, similar to others already posted, is to pay everything possible via Visa card for the float and pay that in full with MM check. This also keeps the number of checks way down.

We do have a few bux in a checking account with a local community bank which is useful when handing out checks as gifts, etc., and you don't necessarily want to advertise what borkerage house you use. Inconsequential dollar amounts involved.

 

[Patrick]

Schwab allows unlimited checks of any amount to be written against the sweep MM in your brokerage account. Currently I'm using the tax free MM and will switch to taxed in January. Typical, competitive rates for either.

Really? I just talked to them yesterday and they said they didn't have a sweep, that I had to purchase the money market finds like a mutual fund, with a stock order. I have a Schwab 1. Is this what you're using?

 

[audreyh1]

according to their website (at least when I opened the account), you can only elect Cash Reserves as the core in a tax-deferred account. Not the account I want to be writing checks out of.

Well, I right checks out of my Fidelity taxable mutual fund account, and it's drawn directly out of Cash Reserves.

And in my taxable brokerage account, although I don't write checks out of it (but I could if I wanted), Cash Reserves has been one of the core options.

Audrey

 

[youbet]

Really? I just talked to them yesterday and they said they didn't have a sweep, that I had to purchase the money market finds like a mutual fund, with a stock order. I have a Schwab 1. Is this what you're using?

That's strange they would tell you that Patrick. They have both sweep MM funds and traded MM funds. The traded funds pay a tad more but, as you said, must be bought and sold and have minimum amount qualifiers.

The Schwab web site is more difficult to strain information out of concerning their cash investment offerings than, for example, the Vanguard site. But go dig in, the info is there.

 

[MJ]

I now have 2 Bank of Internet checking accounts (Senior and RV) both earning 3.65%. Because I plan to travel overseas most of the year, I will keep as much as $1000 (combined) a month to minimize web transfers through public internet cafes. I got the 2nd checking account to increase my ATM fee reimbursement to $18 a month. Except for a couple of sceduled monthly bills, most of the money will be needed for ATM withdrawals. As I have said in other threads, so far they have been excellent. Their small customer service department is excellent and very cooperative.

 

[shiny]

I now have 2 Bank of Internet checking accounts (Senior and RV) both earning 3.65%. Because I plan to travel overseas most of the year, I will keep as much as $1000 (combined) a month to minimize web transfers through public internet cafes.

This is a good idea MJ, minimize access to your primary bank account.

 

[shiny]

There is no minimum for amount or maximum for number of transactions.

 

[mathjak107]

which fund is your core? Cash Reserves is paying 5%, but my core account is something else that they don't publish the rates for. I think it's closer to 3%, which is why I keep the core to a minimum an sweep the rest into cash reserves.

I have cash reserves as my core ,im not sure if thats still an option on newer account5s but i have mine decades. It started life as daily income trust then converted to cash reserves

 

[Patrick]

That's strange they would tell you that Patrick. They have both sweep MM funds and traded MM funds. The traded funds pay a tad more but, as you said, must be bought and sold and have minimum amount qualifiers.

The Schwab web site is more difficult to strain information out of concerning their cash investment offerings than, for example, the Vanguard site. But go dig in, the info is there.

Youbet, I sent Schwab an email and got the following reply. Apparently I don't qualify for the sweep because I don't have $500K in the account.

"I can definitely understand your confusion. When Schwab opened Schwab
Bank this last year, a lot of accounts with money markets were
consolidated to the Schwab Bank Interest bearing account. This was due to the
higher cost of managing active money market funds. At this time,
accounts with a household balance over $500,000 qualify for the Schwab Money
Market Fund and other sweep money funds. Those under $500,000 will
have as their default money market the Schwab Bank Interest.

Please bear in mind that you have options for your uninvested cash in
your account. Schwab offers the non-sweep Schwab Investor Money Fund
(SW2XX) which you must actively buy and sell in your account. The
minimum investment is $2,500. This money fund is currently yielding 4.67%.
If the Schwab Investor Money Fund falls below $2,500, there is a $5 fee
per month. Another non-sweep money fund that you may consider is the
Schwab Value Advantage (SWVXX). This money fund requires a minimum
initial investment of $25,000 ($15,000 for retirement and custodial
accounts). This money fund is currently yielding 4.96%. If the Schwab Value
Advantage falls below $20,000 ($15,000 for retirement and custodial
accounts), there will be a $5.00 fee. To buy either of these money funds,
click on the "trade" Tab after you have logged into your account on the
Schwab Web site and then the "Mutual Funds" link just below."

 

[Patrick]

Thanks for all the help, folks. It looks like Presidential has the best rate (at least as far as I can tell) at 4.5% up to $25K and 2.75% above $25K. Anyone know why the rate goes down for the higher balances? Most banks seem to do this.

http://www.presidential.com/

 

[youbet]

Youbet, I sent Schwab an email and got the following reply. Apparently I don't qualify for the sweep because I don't have $500K in the account.

Thanks Patrick. Yeah, in aggregate we do meet the half mil requirement, so that explains it.

My satisfaction with Schwab has dropped to so-so the past couple of years. Their expenses are reasonably competitive, but not as low as Vanguard. But, for us, they offset that with excellent customer service. Whether we walk into the local office, use the internet or call, we usually get what we want with a minimum of hassle and that's important to us. They occasionally mention their money management services to me, but never a hard sell. When I call ahead before an office visit, they always have any forms I'll need to sign ready, subject matter experts at hand, etc. For example, I wanted to change some POA's and some option trading privileges on several accounts recently. I called the office down the street and made an appointment. When I arrived all the forms were filled out for my review, packets of info were pre-assembled, subject matter experts were on hand to answer questions and the coffee was excellent.

Because, in my absence, DW would struggle to handle everything through an internet-only brokerage, even if supplemented with telephone (just not her thing), I keep trying to justify that Schwab's higher fees are worth it.

It's a coin toss right nowl

 

[Cut-Throat]

Thanks for all the help, folks. It looks like Presidential has the best rate (at least as far as I can tell) at 4.5% up to $25K and 2.75% above $25K. Anyone know why the rate goes down for the higher balances? Most banks seem to do this.

http://www.presidential.com/

Why not just get an Account that pays around 5% - Like Vanguard MM that pays ~5% or Emigrant ~5% - use a Credit Card for all purchases and pay off the balance monthly. IOW - Elminiate most all checks - Write checks over $250 on the Vanguard Account (If you need to).

 

[mathjak107]

it seems if you had cash reserves in a taxable account with fidelity you were allowed to keep it but now they use a lower paying core. cash reserves in a retirement account is still an option.