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Comment by mrb | Hacker News Reader

«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.

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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.

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