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Comment by SpaethCo | Hacker News Reader

While the new funds are attracting all the attention, I find these other changes more interesting:

Expense Ratios have been slashed across existing funds: https://www.fidelity.com/mutual-funds/investing-ideas/index-...

Premium, Investor, and Institutional classes are all being merged into 1 class with lower fees and no minimums: https://www.fidelity.com/bin-public/060_www_fidelity_com/doc...

For people holding existing Fidelity index funds, you just start paying less now without having to do anything.

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I got this email this morning, short and sweet:

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As of August 1, 2018, we introduced the following changes, which will be automatically applied to your affected Fidelity accounts:

• Removed account fees and minimums

• Eliminated domestic money movement fees

• Lowered expense ratios on all Fidelity stock and bond index mutual funds

• Introduced two index mutual funds (FZROX and FZILX) with a zero expense ratio

No action is required on your part.

---

I've never paid a fee for domestic money movement (EFTs) so I wonder what that refers to.

Fidelity also has an extremely attractive product in their cash management account (free checking account with ATM reimbursements)

«Fidelity also has an extremely attractive product in their cash management account (free checking account with ATM reimbursements)»

Yes, just like Charles Schwab. I wonder why most Americans don't know about this and either pay ATM fees, or endure the hassle of never using an ATM outside of their bank network.

To get a free Schwab checking account, you have to get a checking account paired with a brokerage account. They hard pull your credit before they approve you. If you have a low credit score, you won't be approved. Most Americans' credit scores are too low.

Because banks have much greater presence and marketing reach, being involved in a lot more of the ordinary financial transactions than just withdrawing cash. As only one example of this, brokerage checking doesn't have an obvious path towards insured savings vehicles, you'll have to do some research and have an investor mindset which most banking customers don't want to bother with. If you have a loan, it also becomes another account and institution to deal with, which if you're not an investor you don't want.

Schwab is kind of a PITA for opening a savings account though. I had to fax them a form to open it.

my guess is this is not a common use case among their customers. why do you want a savings account anyway?

I keep my emergency fund in a high interest savings account. I don't know what Schwab's rates are, but if you don't care about that yield and have other accounts with Schwab, maybe the simplicity is worth it.

why not just grab some shares of a bond fund? even with the best savings accounts you are slowly burning your money.

Maybe try I-bonds? Better Rates than high interest savings.

The downside is that you can only invest 10k at a time and you’re illiquid for six months.

Why is this getting downvoted? Current return on I-bonds is 2.52%, higher than any high-yield savings that I know of. It compounds semi-annually, tracks inflation, and there are no penalties for withdrawal. Seems perfect for an emergency fund and less hassle than a CD ladder. I'm not shilling an investment product, it's available direct from the US treasury:

https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

It's not a bad idea. I've thought about migrating to I-Bonds. I've kept it in a savings account for the liquidity, but if you are okay with having a less liquid emergency fund, go for it.

Because "emergency fund" and "illiquid for six months" aren't a great combination?

Illiquid in the sense that it takes a few days to liquidate. One can always get back their original investment with no penalties.

Is that correct? According to the TreasuryDirect website, you can't redeem a bond within the first year. If a bond is less than 5 years old, you pay a 3 month interest penalty.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds...

That is correct. It's twelve months instead of six. I was mistaken. Generally speaking an emergency fund should be 3-6 months of income. I justified the illiquid period by moving a third of my fund into it at a time.

The interest "penalty" is simply not getting back the interest accrued in the prior three months.

Or Ally, a stand-alone product. I’ve had an account with them since 2010.

I think ally limits you to $10 a month. I don’t use an ATM that’s not in-network. I’ve only done it once (well three times because you can only withdraw up to $400 at a time and I needed a thousand). Iirc you get the money back at the end of the month.

How do you do ATM deposits?

Use the Fidelity app to take a photo of the check. I use Fidelity checking for withdrawaling foreign currency too. Easily the best banking product I’ve ever used and I can’t imagine using anyone else.

I deposit checks through Schwab's Android app. But this only works for checks under $10k. Above that you have to deposit them at a Schwab location.

You can also mail checks in (though I don't know about $10k and above).

You can mail checks much larger than $10k in. That is what I usually do, as it’s less of a hassle than getting to a branch during business hours. Schwab even provides post paid enevelopes for you to use.

If you have good credit, their credit card is good for a daily driver if you're the type who pays off a card monthly. Unlimited 2% cash back, no annual fee. You can set up the cash back to go straight into investment accounts too.

It is a good one, but my experience is that the customer service on the card is not so hot. Namely they are overly aggressive with fraud detection, which combined with slow card replacement can be problematic. They canceled my card once because I swiped it instead of inserting the chip for reading, said they could not reverse the action, and then took over a week to get me a replacement card (granted there was a holiday weekend, but this was very different from Amex who always have overnighted replacement cards)

I've had the opposite experience with my Fidelity card. I've accidentally swiped it a few times with no consequences, just had to insert the chip afterward. Their fraud detection has been spot on. I must've gotten skimmed and incurred a fraudulent charge. The card was immediately cancelled, I was notified, and three days later I had a new card in the mail.

> they are overly aggressive with fraud detection

That's the worst, BoA is like that too. Chase and Amex seem to work well for me.

I've never hard my card permanently deactivated. They will definitely freeze my card if I make three or four large purchases in a day or over a weekend, but there's always an immediate robo-call asking me to confirm and then it's instantly active again.

Fidelity also has an extremely attractive product in their cash management account (free checking account with ATM reimbursements)

Schwab has this as well, and a better privacy policy than Chase to boot.

"I've never paid a fee for domestic money movement (EFTs) so I wonder what that refers to."

It might be for wire transfers, which are same-day money transfers.

One of the truly few notices from companies these days that aren't lies about "improving our services to you" or have a catch.

This sounds like an excellent way to keep customers.

I wonder what forced this decision. I'm guessing they were losing too many customers to Vanguard?

The entire fund industry is experiencing cost compression. It's a race to zero

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