do I still need USAA checking

[perinova]

So a long time ago (around 1994), I opened USAA checking account which allowed for easy banking while relocating. At the time, but for USAA, banking was mostly local.

Today I find myself monitoring monthly the money I have in the account and transferring money from other more profitable account.
There are better places it seems nowadays, betterment and wealthfront etc...

But since I already have investments at Fidelity I am thinking of simplifying everything and using their cash management account, getting 2.7pct interest at present.

Any comment in doing this? I don't think I am losing anything by doing this.

Thanks.

 

[Kork13]

Yeah, over the years I've drifted further & further from USAA. I used to have everything there, now almost nothing... I've considered abandoning it completely, just haven't pulled the trigger yet. Realistically, there's basically nothing that you lose from leaving them. Plenty of better options are available now. They used to be great .... but they've slipped pretty far over the last 15-20 years (imho).

 

[FLSUnFIRE]

When married our "ours" account was as USAA. I kept my individual open but I just use it for any peer to peer payment linkages so if they are compromised there is little to gain with a very minimal balance. I move money in during the month and sweep it to my CU at the end of each month. Since my tour money is paid via PayPal and Venmo (occasional tips) it is my defacto business account. I have no issues with USAA but they are not my primary institution but don't expect great returns on cash anyway. Any cash I want to work for me is in MMF, T-Bills, or occasionally CDs with promotional rates.

 

[foxcreek9]

Fidelity Bloom account has automatic sweep into SPAXX (currently about 5%) while CMA does not. There is no longer a signup bonus for Bloom but the savings account (vs the spending account) will give you 10% bonus up to $30 each year. I have all our credit card payments pulled from Bloom, checks are free, 10 cents back on each debit card purchase.

I also have a CMA account for the debit card on international travel.

 

[target2019]

Still have auto & home, and two credit cards. We had checking briefly, a very long time ago. But local bank and HYSA make more sense, at least for us.

 

[FLSUnFIRE]

Yeah, over the years I've drifted further & further from USAA. I used to have everything there, now almost nothing... I've considered abandoning it completely, just haven't pulled the trigger yet. Realistically, there's basically nothing that you lose from leaving them. Plenty of better options are available now. They used to be great .... but they've slipped pretty far over the last 15-20 years (imho).

I think it depends. I'm very happy to have them for my homeowners and auto in FL They are competitive (at least for the risk group I get thrown in) for auto but I do pay a premium on my HO but its worth it to have a company with great customer service and deep pockets insuring me should I need it.

I feel like a lot of mutual companies and CUs end up declining as they expand their membership base and feel they lose a bit of their mission. Why grow if meeting the members' needs (to justify higher corporate salaries?!).

 

[MichaelB]

We’ll stay with USAA, all our insurance is with them and it’s almost impossible to get homeowners coverage here is South Fl. In addition, my mum has her pensions deposited with USAA and changing that would really be time consuming.

I’ve had my share of squabbles with USAA over the years, but at the same time they’ve made much more of an effort to accommodate requests that other banks refuse to even consider. It would be nice if they paid more interest or had a money market option.

 

[RE2Boys]

Simplification is always a good idea, especially as you get older. While I see attractive rates being offered at many banks, especially on -line, these days I'm very mindful of keeping our finances as simple as possible in case something happens to me and it can be very unexpected, such as the heart surgery I had four years ago. I remember the night before surgery, of trying to show my wife how to transfer money to our main checking account if case I'm incapacitated for a lengthy period. Used a Chromebook on a hospital bed. And I was incapacitated due to a stroke following the surgery.


Simple is good. And it simplifies tax season, less statements required.


I closed all financial accounts with USAA decades ago, but have found their insurance and claims handling outstanding and would not change insurance companies to save a few dollars ever. And I like the twice a year rebate checks from their Subscriber Savings Accounts.

 

[teej1985]

I think it depends. I'm very happy to have them for my homeowners and auto in FL They are competitive (at least for the risk group I get thrown in) for auto but I do pay a premium on my HO but its worth it to have a company with great customer service and deep pockets insuring me should I need it.

I feel like a lot of mutual companies and CUs end up declining as they expand their membership base and feel they lose a bit of their mission. Why grow if meeting the members' needs (to justify higher corporate salaries?!).

There's also the fact that there are not a lot of good options in Florida for homeowners insurance in the first place. State Farm isn't risking the entirety of State Farm for Florida, they've created "State Farm Florida", and if a big hurricane BKs them, some homeowners might be out of luck.

 

[target2019]

Keep in mind that the bank and insurance company are separate matters. You can keep the insurance without any USAA bank products. Maybe I'm wrong?

 

[foxcreek9]

There's also the fact that there are not a lot of good options in Florida for homeowners insurance in the first place. State Farm isn't risking the entirety of State Farm for Florida, they've created "State Farm Florida", and if a big hurricane BKs them, some homeowners might be out of luck.

SF-Florida was created after Hurricane Andrew, it was noted that if Andrew would have turned north and hugged the shoreline it would have bankrupted the entire P&C insurance industry. Andrew cost SF more than $3 billion in today's money.

 

[teej1985]

Keep in mind that the bank and insurance company are separate matters. You can keep the insurance without any USAA bank products. Maybe I'm wrong?

Absolutely, but having a banking product provides a multi-product discount on insurance in some states.

I have a token USAA Credit Card, but seldom use it.

I did open a checking account a few months ago for A $200 new account bonus though, but I also don't use it.

 

[schenbew]

Back when I opened my USAA checking account 35+ yrs ago, they were the best game in town for active duty military. I did all my banking through them and found them very accommodating to the unique requirements of military life, especially when overseas. All of our children also bank at USAA...I opened their accounts when they were kids so they would have the option to become USAA members when they became adults.

We also do all of our home, auto, term and umbrella insurance through USAA - I have not found a better combination of insurance price, coverage, and service, especially after making a claim. The few times we had to make an auto claim, the repair shop always commented on how I "was lucky to have USAA...the other companies are all a pain to deal with". I know I can save a few $ shopping around, but when I checked Amica car insurance directly against USAA, found it substantially more expensive...I suspect bundling is the reason.

However, after retirement I found it necessary to have a local bank, and became a member of a local credit union, especially after acquiring some rental properties - it's our primary account now. I still keep my USAA checking account to simplify bill paying for all USAA insurance premiums and to simplify transferring cash to our kids, since they all maintain their USAA accounts. And that USAA credit card I opened up 35+ yrs ago is definitely a keeper for credit scoring!

 

[audreyh1]

So a long time ago (around 1994), I opened USAA checking account which allowed for easy banking while relocating. At the time, but for USAA, banking was mostly local.

Today I find myself monitoring monthly the money I have in the account and transferring money from other more profitable account.
There are better places it seems nowadays, betterment and wealthfront etc...

But since I already have investments at Fidelity I am thinking of simplifying everything and using their cash management account, getting 2.7pct interest at present.

Any comment in doing this? I don't think I am losing anything by doing this.

Thanks.

You aren’t limited to 2.7% interest in your Fidelity cash management account. You can buy money market funds in that too. I usually buy Fidelity Govt Cash Reserves which is yielding around 5%. Fidelity automatically pulls from it to satisfy checks/withdrawals when the core is depleted. It’s very convenient.

Regardless I still maintain a bank checking account and use it for billpay. I have credit cards issued by the same bank and get some perks.

 

[perinova]

Appreciate all your insights!

fyi there is a recent thread on the subject "Fidelity as a one stop shop" in the boggleheads.

The cash manager option seems to nicely fit all requirements to not to have to manually transfer funds from investments.

Just one concern is to have the same log-in to the CMA account as the investments. I am not sure if multiple log-in are an option with Fidelity.

 

[audreyh1]

Appreciate all your insights!

fyi there is a recent thread on the subject "Fidelity as a one stop shop" in the boggleheads.

The cash manager option seems to nicely fit all requirements to not to have to manually transfer funds from investments.

Just one concern is to have the same log-in to the CMA account as the investments. I am not sure if multiple log-in are an option with Fidelity.

No, just one log-in per individual AFAIK.

Fidelity shows you all your accounts.

 

[The Cosmic Avenger]

Keep in mind that the bank and insurance company are separate matters. You can keep the insurance without any USAA bank products. Maybe I'm wrong?

I believe that's correct, but we keep our USAA checking open to autopay our homeowner's and auto insurance. Our primary checking, with direct deposit, is at Fidelity, and I just transfer some funds over to USAA periodically to keep it at a few hundred dollars or so.

USAA was great in the early days, they were very early to online banking, and they always sent us postage-paid deposit envelopes upon request. And about a year ago we had a homeowner's claim and they were great to deal with. But their banking and credit cards are really just slightly above average at best. I keep the USAA credit card open 1) to keep our total limit higher, and 2) in case other cards are unavailable (e.g., closed due to fraud).

 

[FLSUnFIRE]

There's also the fact that there are not a lot of good options in Florida for homeowners insurance in the first place. State Farm isn't risking the entirety of State Farm for Florida, they've created "State Farm Florida", and if a big hurricane BKs them, some homeowners might be out of luck.

Ding-Ding! Yep, USAA is still USAA so if there is a catastrophic loss, I expect a quicker resolution as they are the entity I'll deal with and not a subsidiary that instantly goes insolvent and needs to get bailed out and/or deal with delays with reinsurers. I only have a condo policy so while the % I pay additional for USAA sounds steep the $ amount is fairly low. I just need to hope the HOA policy for the building shell pays out in a timely manner!

 

[militaryman]

I appreciate this thread because it reminded me to stop keeping any savings (or very minimal) in USAA as it gets basically no return. Keeping an average $5,000 in my SPAAX money market fund at fidelity or the ALLY savings account instead of USAA covers my Netflix payment each month.

 

[teej1985]

I believe that's correct, but we keep our USAA checking open to autopay our homeowner's and auto insurance. Our primary checking, with direct deposit, is at Fidelity, and I just transfer some funds over to USAA periodically to keep it at a few hundred dollars or so.

USAA was great in the early days, they were very early to online banking, and they always sent us postage-paid deposit envelopes upon request. And about a year ago we had a homeowner's claim and they were great to deal with. But their banking and credit cards are really just slightly above average at best. I keep the USAA credit card open 1) to keep our total limit higher, and 2) in case other cards are unavailable (e.g., closed due to fraud).

That's not necessary You can auto pay your USAA homeowners and auto insurance with any Visa or Mastercard credit card, for no fee.

FLSUnFIRE was also unaware of this though it's been the case since at least 2010 when I opened my first policies.

 

[deserat]

I echo many here - have been a USAA member since 1981. They used to be a great one-stop shop - not so much anymore. I use their insurance products and keep a notional amount of cash in my checking account to cover the auto-pay to my credit card for the insurance premiums. I have had several painful phone calls with them when moving to/from overseas the last few times and it was baffling as they used to be so easy to deal with as military personnel tended to move a lot. Things change, I guess. For now, I will stay with them for insurance only.

For FL residents, I've heard that USAA will cover your house, although it is quite expensive. My father, who has lived in mid FL for 30+ years now was not as happy as he used to be, however, he said that is his only option for now.

 

[FLSUnFIRE]

That's not necessary You can auto pay your USAA homeowners and auto insurance with any Visa or Mastercard credit card, for no fee.

FLSUnFIRE was also unaware of this though it's been the case since at least 2010 when I opened my first policies.

That info paid for the cost of my E-R subscription! Now when my 2% WF card dings that my USAA bill hit I get another hit of feel good hormones. I did confirm that the cost did not change with the first charge vice debit.

 

[perinova]

I created a CMA account with Fidelity, which I didn't technically have to do since the brokerage account can have checking nad debit card. But it will allow for easier management.

The management tool will not remove cash automatically if hitting the max level but there is an overdraft protection drawing from the brokerage account.

Will they have a problem if I set the overdraft protection and leave the account empty at all times?

 

[audreyh1]

Don’t know.

But since the CMA is actually a full brokerage account with a cash management wrapper (really I think that’s mostly a FDIC insured bank core, plus maybe more debit card perks), you can buy any other security in there. You should also be able to transfer securities in kind from another Fidelity brokerage to fund it.

I expect the overdraft protection can only be filled by MM Funds in the linked brokerage account anyway. So just keep sufficient MM funds in the CMA directly. And as I mentioned above, Fidelity will automatically draw from MM funds when the core is depleted. I use that convenient feature all the time.

 

[perinova]

Simplify Vanguard into Fidelity

still on the same 'simplification' subject, it looks like it is possible to hold Vanguard funds in a Fidelity account.
There is no fee to sell them, but I think some fee to buy.

Anyone has done this?