Vanguard to end cash management service

[gwraigty]

I just switched to Fidelity for cash management. Like to keep a lot in my checking account, and now I get 2%+.. That said, I certainly don't use it as a debit card.

My purchases go on cash back credit cards whenever possible, which is usually 99.99% of the time. I keep a small amount of cash in my wallet that literally sits there for years. I've set a calendar reminder about a month before the expiration date of any such cards to use them in some way to keep them active.

Fidelity sent a letter asking if I wanted new cards sent, but not everyone does. I don't want to have to get cash from an ATM in a rare pinch only to find out the card expired. Once I was trying to pay for my groceries at a store that only accepted Discover at the time. The terminal wasn't working, so I had to go to the in-store ATM to withdraw money to pay for them. Luckily, I remembered my PIN. Recently, at a post-funeral reception, it was cash only for purchases less than $10 at the bar. I had to dust off a $20 to get a cranberry ginger ale!

 

[Lsbcal]

Vanguard may have given some customers a present. Now they can start using credit cards to pay many of those bills and collect the points.

I just have the day-to-day stuff done in our Chase account. The SS checks come in there. Then bill pays are prioritized to Chase CC's so I get the points on those. Chase automatically pays the CC's too. So almost all of this is automated and I just concentrate on watching the flows maybe once a week.

Once a month I check and move some VG money to Chase if necessary. Right now it's coming out of RMD's.

It's true that Chase pays nothing on the balances but much of this is made up by the CC points. And the automation is worth something to me.

 

[gwraigty]

Speaking of Chase, I've seen this new (?) investing account advertised when I log in to manage my credit cards:

https://www.chase.com/personal/investments/you-invest

It may be that balances in the YouInvest account count towards waiving fees in a Chase checking account. If so, this is another interesting alternative. Note the $2.95 commission for stocks/ETFs.

Disclaimer: I only have Chase credit cards and don't bank or invest with them, so I can't give an opinion on YouInvest. Just bringing it to folks attention.

 

[easysurfer]

I just got an email from VG asking me to take a survey about how I manage my cash.

 

[RetiredAt55.5]

I can see why some folks who used the service are upset. The reason cited by VG for discontinuing the service seems pretty lame. Had they said that the service is expensive and by discontinuing it permits them to focus on continuing to lower fees on mutual funds and etf's, I think that rationale would have been better received.

Yup, that's exactly how I feel.

 

[RetiredAt55.5]

Vanguard may have given some customers a present. Now they can start using credit cards to pay many of those bills and collect the points.

I've always paid bills with credit cards, when they allow it without a fee.

For me, typically that's medical bills, and phone service. Our condo used to accept them for condo fees, but now has a 3 percent surcharge. Same for our college bills, local taxes, car insurance, electricity/gas/water - all want to be reimbursed for the CC fees.

At one time, you could buy Ibonds with a CC without a fee.

 

[grasshopper]

I use/used the heck out of my Vanguard Advantage account. Our whole financial life was on automatic pilot. I always told Ms G just keep the sweep account filled up and that's all you have to worry about. We have 2 other checking with savings accounts, one at Wells Fargo that I was moving away from and CapOne with MM and CD's connected so I am good to go, but not a happy camper.

 

[audreyh1]

I use/used the heck out of my Vanguard Advantage account. Our whole financial life was on automatic pilot. I always told Ms G just keep the sweep account filled up and that's all you have to worry about. We have 2 other checking with savings accounts, one at Wells Fargo that I was moving away from and CapOne with MM and CD's connected so I am good to go, but not a happy camper.

What’s incredible to me is that these accounts have been around for a very long time. One upset boglehead had theirs for 15 years! This is highly disruptive to long time customers.

 

[gwraigty]

What’s incredible to me is that these accounts have been around for a very long time. One upset boglehead had theirs for 15 years! This is highly disruptive to long time customers.

Even though I didn't use this service, I do like to keep up with what Vanguard is doing because my husband's 401K is with them. The interesting thing is that we had no clue as to how lacking they were in various areas, including basic competence, until a VBO was made available in his 401k a couple of years ago. The money will be rolled over into the appropriate IRA/Roth IRA at another firm ASAP after my husband retires.

 

[Lsbcal]

Even though I didn't use this service, I do like to keep up with what Vanguard is doing because my husband's 401K is with them. The interesting thing is that we had no clue as to how lacking they were in various areas, including basic competence, until a VBO was made available in his 401k a couple of years ago. The money will be rolled over into the appropriate IRA/Roth IRA at another firm ASAP after my husband retires.

I think VG is very good at creating stock and bond funds. What you might loose in customer service is made up by reduced fees and well managed components of a portfolio. Of coarse, there are decent alternatives.

 

[foxfirev5]

A few years ago we were at a crossroad regarding our future with Vanguard and Fidelity. A botched rollover of my DW's IRA led us to keep separate accounts at both. Vanguard is fine as long as it's plain vanilla 3 fund type investing. We keep DW's IRA and both Roth's in simple Admiral share funds with nothing fancy. We have not taken the bait to "Upgrade" to a brokerage which would take away reinvestment features which we use. I.E. we invest dividends from one fund into another. Also if we had gone all in with VG the Advantage system was to be implemented. I have referred to VG as the Walmart of investment firms. This was not fair to Walmart. At least they are expanding their offerings and moving with the times. If I were a new investor there are certainly better choices out there.


By pure luck we went with our 401 rollovers to Fidelity and have been impressed by the customer service, the cash back card, bill pay and other features. The bond/CD analysis tool and bond desk are top notch. If I didn't firmly believe that one should not have all their eggs in one basket I would move it all to Fidelity. Also I'm sure there are a few other firms out there that are just as good.

 

[statsman]

A few years ago we were at a crossroad regarding our future with Vanguard and Fidelity. A botched rollover of my DW's IRA led us to keep separate accounts at both. Vanguard is fine as long as it's plain vanilla 3 fund type investing. We keep DW's IRA and both Roth's in simple Admiral share funds with nothing fancy. We have not taken the bait to "Upgrade" to a brokerage which would take away reinvestment features which we use. I.E. we invest dividends from one fund into another. Also if we had gone all in with VG the Advantage system was to be implemented. I have referred to VG as the Walmart of investment firms. This was not fair to Walmart. At least they are expanding their offerings and moving with the times. If I were a new investor there are certainly better choices out there.

By pure luck we went with our 401 rollovers to Fidelity and have been impressed by the customer service, the cash back card, bill pay and other features. The bond/CD analysis tool and bond desk are top notch. If I didn't firmly believe that one should not have all their eggs in one basket I would move it all to Fidelity. Also I'm sure there are a few other firms out there that are just as good.

Interesting. I guess I have not read enough posts in my time here, but I rarely see the recommendation of Fidelity over Vanguard. I had been wondering about Fidelity because, as you indicated, we're not sure we want all of our eggs in one basket. One of us needs to roll over a 401(k) into an IRA, and I hesitate to have all of our IRAs and other investments with the same company.

 

[Lsbcal]

I find it important to have stock/bond money at one firm. Might depend somewhat on how much you trade or reconfigure investments.

 

[ziggy29]

I used to have a Schwab One AMA, until they discontinued the AMA. It was convenient to have the automatic money market sweep, but for the most part my credit union has given a much better interest rate on checking anyway (currently 2.00% on regular checking if a few criteria are met), and given the ease of moving money on just one business day's notice it was less important to me to keep that in place. I still have the brokerage account and a Schwab Bank checking account linked to it, but the latter is rarely used.

 

[foxfirev5]

Interesting. I guess I have not read enough posts in my time here, but I rarely see the recommendation of Fidelity over Vanguard. I had been wondering about Fidelity because, as you indicated, we're not sure we want all of our eggs in one basket. One of us needs to roll over a 401(k) into an IRA, and I hesitate to have all of our IRAs and other investments with the same company.[/QUOTE

Definitely do your own homework. I don't have a dog in this hunt. Merely stating my experiences. You certainly could do worse than Vanguard. However I feel Fidelity is much better overall. Also I don't think this is a minority opinion. I suggest taking a trip to the Bogleheads site for perspective.

 

[audreyh1]

I’m happy to have the bulk of our investments at Fidelity, and the Fidelity Cash Management account has been very useful.

But we do hold a large amount in CDs and high yield savings at various banks and credit unions. And it will probably stay this way for a while. We’ll probably always have at least one high yield savings account and one bank checking account just to have some substantial funds available in case access to our Fidelity accounts is interrupted temporarily. Or vice versa!

We do have a small Schwab account mainly for the Schwab bank benefits. Pretty much only use this for travel.

 

[gwraigty]

I have referred to VG as the Walmart of investment firms. This was not fair to Walmart. At least they are expanding their offerings and moving with the times. If I were a new investor there are certainly better choices out there.


By pure luck we went with our 401 rollovers to Fidelity and have been impressed by the customer service, the cash back card, bill pay and other features. The bond/CD analysis tool and bond desk are top notch. If I didn't firmly believe that one should not have all their eggs in one basket I would move it all to Fidelity. Also I'm sure there are a few other firms out there that are just as good.

Priceless!

I'm happy with both Fidelity and Schwab. I also don't like all my eggs in one basket. I left TDAmeritrade several years ago due to their bond pricing. Yes, they charge no commission. But they were charging anywhere from $50 to $200 extra for 5 bonds as compared to Fidelity/Schwab. Even so, I'd recommend TDAmeritrade over Vanguard any day. They also have local offices, if that's important to anyone.

 

[COcheesehead]

Count me as a Fidelity fan. They offer many tools and value add services and I love their cash management.

 

[Scuba]

I’m also a Fidelity fan. Excellent website and great customer service. Also have had their cash management account as our primary checking account for many years. Used to have only this as our one checking account, but when we got a HELOC before our ER, to get the best rate we had to open a zero fee checking account at a local bank. This has worked well for us as now we have a bricks & mortar bank that we can walk to that handles cash. Fidelity does not transact anything in cash at its branches so on the rare occasion that we need to deposit actual cash, convert change to bills, etc., it does come in handy to have a bank in addition to Fidelity. We also use the bank’s safe deposit box offering.

With respect to the Fidelity vs Vanguard difference, I’ll always be grateful to VG for the low costs they drove in the industry, and I’ve recommended VG to relatives who need a simple solution. However I prefer Fidelity for DH and me. I like being able to meet with a rep periodically for advice at no charge, and have found our rep to be helpful while not trying to “upgrade” us to services we don’t want or need. Also like the Fido 2% cash back credit card and no-fee ATM card anywhere in the world.

 

[easysurfer]

Guess the VG cash management service end doesn't impact me as I didn't even know VG had a cash management service. My only cash with VG are MM funds. Like W2R I use my checkbook for paying my bills.

As for VG vs Fidelity, with full disclosure, all I have is $ in VG and am happy with that, but don't see why the choice has to be either or if one chooses both.