Two accounts in Charles totaled 1.8M. Should I merge into one?

[fh2000]

After TDameritrade merged with Charles Schwab, I now have 2 brokerage accounts with Charles totaling 1.8M. I am thinking of merging into one to simply accounts. I am not sure about any risks for doing that. According to Charles Schwab link below, they are FDIC insured for $250,000. But is it per account, or per bank?

https://www.schwab.com/legal/account-protection

 

[jim584672]

After TDameritrade merged with Charles Schwab, I now have 2 brokerage accounts with Charles totaling 1.8M. I am thinking of merging into one to simply accounts. I am not sure about any risks for doing that. According to Charles Schwab link below, they are FDIC insured for $250,000. But is it per account, or per bank?

https://www.schwab.com/legal/account-protection

Per Bank, merging would have no impact on insurance.

 

[jebmke]

When did FDIC start insuring brokerage accounts? If these are CDs in the brokerage, the insurance applies to the bank issuing the CDs, not Schwab or Ameritrade

 

[PaunchyPirate]

A couple things...

Charles Schwab Brokerage is not a bank. So it is not subject to the FDIC portion of the website page you provided. The applicable portion is the SIPC coverage discussed on that page.

Charles Schwab also owns a bank called Schwab Bank. If you have funds in that bank, then they are covered by the FDIC insurance. A Schwab Bank account can be viewed and manipulated from your Schwab Brokerage online account, but technically, it is a separate entity subject to the different insurance rules. This would be a Schwab Investor Checking or Savings Account. Any cash that Schwab Brokerage holds in a bank on your behalf (such as your cash balance amount (sweep) in the brokerage account) would be held in a bank that is insured by FDIC. That may or may not be Schwab Bank.

Having said that, I have no problem storing more than $1.8M in investments in a single brokerage account. I don't think spreading it out over multiple accounts helps any from an insurance coverage perspective.

 

[Montecfo]

After TDameritrade merged with Charles Schwab, I now have 2 brokerage accounts with Charles totaling 1.8M. I am thinking of merging into one to simply accounts. I am not sure about any risks for doing that. According to Charles Schwab link below, they are FDIC insured for $250,000. But is it per account, or per bank?

https://www.schwab.com/legal/account-protection

it would depend on the type of account. Taxable, tax deferred, IRA Roth IRA?
HSA?

 

[fh2000]

it would depend on the type of account. Taxable, tax deferred, IRA Roth IRA?
HSA?

On Charles Schwab website, both accounts show as 'Designated Bene Joint' accounts. It is after tax brokerage account that holds securities and cash. I am also issued an ATM card and checks from one account, and I use it to withdraw cash overseas when traveling since they reimburse foreign transaction fees. So, is it also a bank account?

That is why I thought it is protected by FDIC, but as 'PaunchyPirate' mentioned, it is probably protected by SPIC.

 

[dmpi]

The only downside I can think of is the rare case where you have long and short positions of the same stock in different accounts.

Also make sure you have the beneficiaries set up right after you do the merge and don't just close the empty account. You may need some tax documents from that account.

 

[Gotadimple]

On Charles Schwab website, both accounts show as 'Designated Bene Joint' accounts. It is after tax brokerage account that holds securities and cash. I am also issued an ATM card and checks from one account, and I use it to withdraw cash overseas when traveling since they reimburse foreign transaction fees. So, is it also a bank account?

That is why I thought it is protected by FDIC, but as 'PaunchyPirate' mentioned, it is probably protected by SPIC.

Your bank account with Schwab Bank covers the ATM and check-writing (check the name of the bank on the check-writing). FDIC Insurance applies up to $250,000 sitting in Schwab Bank. If you own an CDs in these taxable accounts, those funds are also protected by FDIC but the protection comes from the bank that issued the CDs, not Schwab.

Your brokerage accounts 'Designated Bene Joint' accounts are covered by SIPC. SIPC protection is equal to $500,000 should the firm fail and covered uninvested cash (not in a bank account) plus securities, plus Schwab also has an excess SIPC insurance coverage of $600,000.

All of this is outlined in the link you provided. Customer Service is also very helpful with answers. You may also have a Schwab representative assigned to you given the value of your accounts who can help with questions.

- Rita

 

[OldShooter]

... You may also have a Schwab representative assigned to you given the value of your accounts who can help with questions. ...

Unless Schwab has changed its plans, OP is a "Pinnacle" customer by virtue of being over $1M and should have a specified named rep assigned. I think that comes with a preferential customer service phone number too.

OP, I suggest that you contact the nearest Schwab office and ask about having a rep assigned. They are probably all going quietly nuts trying to deal with the flood of new name customers coming at them. They may just be a little behind in the work. Be sure to brokercheck the rep to understand their experience. If that's OK and you "click" with them when you make contact you're good to go. If not, ask the branch manager for a new name and explain what you're looking for. Best to start out well, though reps do change from time to time. I am sure we've had ours for ten years, though.