Hacker News Reader

Comment by deathanatos | Hacker News Reader

This is always the answer that gets posted. AIUI, though, the decent-interest-rate accounts are only available from online-only banks, and as recently as last year, I was required to visit a branch (…3, as it was…) in order to conduct some transactions, largely due to credit cards having a daily limit.

(I also sort of loathe the idea of needing to continually update a bunch of ACH information every year while I chase whatever bank is currently trying to draw customers with a temporarily decent rate.)

(And honestly the whole thing is kinda stupid every time I hit it. Businesses tend to give you shocked-pikachu-face when you can't use a CC due to the limit — like you've got to know these exist? And my limit is standard, as they go. And daily limits are trivially circumvented: you just spread the transaction across multiple payments spread out over time. In business, this hack^W method is called a "payment plan".)

View on HN

Fidelity can get you a better rate with their treasury money market, which works for Bill pay / etc.

They have branches in most major US cities I think.

seconding. Recently transitioned to fidelity's cash management account and have done a cash advance on the debit card at a local, non-affiliated bank with 0 fees involved.

Checks the boxes for me, personally.

You don't even need to use the official CMA, just a regular old brokerage account ticks basically all the boxes (debit card, checks, bill pay, etc)

But yea there's a CMA too

ostensibly the CMA offers better atm reimbursement, but then the brokerage debit card also does, so that's weird.

The major difference:

sweep in CMA is FDIC, the brokerage is SIPC (but held in treasuries). The underlying thing (US government ) is the same, but FDIC has way better turnaround. But because it's FDIC on the underlying bank (Fidelity has no banking charter), it's not clear to me how much benefit that even is.

FDIC turnaround is faster, but only for failure of the underlying bank, not fidelity. If fidelity fails, you'll still have some SIPC latency to resolve things, instead of single-business-day FDIC awesomeness.

https://www.fidelity.com/spend-save/fidelity-cash-management...

(Note that SPAXX was up to about 5% 7-day yield within the last few months, IIRC, but currently 4.25%.)

i do two tiers of banks. direct deposit into a chase checking account. i pay down everything from here. then i transfer what’s left (minus $500) to an ally savings/invest account. lets me use ATMs and branch services with chase while having a higher savings rate with ally. if i need to pull a wad of cash out, i generally know more than a couple days ahead of time for a transfer to clear. if i wanted i could chase savings account interest rates and move from ally to somewhere else, but what a hassle. 0.5% on 100k is $500, and not worth it to me. ally’s rates are generally fine imo for me not to worry about it.

i’ve only ever hit debit card limits when trying to buy like a car. if you’re hitting cc limits, i dunno, maybe you have more liquid cash where smaller interest rate increases are worth the squeeze.

edit: ok i totally forgot i moved the bulk of my ally savings into an ally invest account holding a vanguard money market fund bc the rate was higher. this is a little less work than opening an account with another bank at least. the rate was 5.4 and is now 4.5. ally savings account is at 3.8. cds, ibonds, money market funds, these are all vehicles i never used prior to covid but have since. chasing it all around is annoying, but i only take stock maybe every 6 months. there’s diminishing returns here since everything past the efund gets invested in an index fund anyway.

> the decent-interest-rate accounts are only available from online-only banks

One does need to look around, whether for national or local, and for instance not all local credit unions which can get close to the rate you would pay on a mortgage advertise on the web.

Open a brokerage account and buy SGOV with your cash savings. Done.

IBKR just pays you like 4-5% on idle cash, so do a few other brokerages. Don't even have to buy anything.

Sure, but you’re back to moving to a brokerage who gives a good rate. If someone doesn’t already have a brokerage then IBKR is a fine choice. SGOV works with any brokerage and is mostly state tax free as a nice bonus.

Ah gotcha.

Reply on news.ycombinator.com