When online banking was novel and rare I started using State Farm Bank, as they were one of the first in the online space, and I already was a customer of their insurance company. They have sold their bank to US Bank, so my State Farm accounts will turn into US Bank accounts. Instead of getting yet another account, with yet more statements, another app, etc. I’d like to consolidate my banking into one of the other places that holds my money.
I’d like advice on which one:
Fidelity
My cash will actually earn interest in the FZFXX or SPAXX money market funds. Those are both about 0.90% year to date, with a 0.42% expense ratio.
Chase Bank
They will give me $500 to open an account there.
The interest rate is 0.01%.
My credit union
They are probably less evil than the other two choices.
Valuing my time at 0, the best option is to move all of my money to Chase, then when I’ve fulfilled the obligations necessary to get the $500, move my money to Fidelity. If I just move it to Fidelity I’ll earn $500 in interest in 1-2 years, if rates hold steady.
If there was a clear answer I wouldn’t need help coming to a decision. Anything to consider I’m overlooking?
Evil maybe, but Chase is too big to fail. So it also has that going for it. And I like their online banking app. It let me change my mortgage payment from once a month to every two weeks just an hour ago.
I do the Chase thing every year. Well, I did until last year, when they changed the rules to only allow it every couple of years (or longer, I can’t remember now what the limit is).
Personally, I need my bank to offer a bill-paying service or a checking account and access to ATMs convenient to me. Do you ever need to talk to a teller, say to cash in change, or buy quarters for laundry? Or are you happy with an entirely online bank?
For the Chase deal I’d have to park about $20,000 there for six months. So that is about a 10 times better rate of return than putting the $20,000 in Fidelity. If I’m happy with Chase, I’ll probably keep them for my in-and-out checking account type transactions, but I should really move the savings to Fidelity where I can put it in something safe that actually earns some interest.
That’s good to know about Chase. I have it installed, but I can only use it to check on my mortgage, which isn’t very useful in measuring how well the app works. Fidelity’s app has all of the necessary features, but it is more annoying to use, as it also wants to give me lots of news and other stuff. I can probably turn much of that off.
I used to do that with Gevalia coffee, until they stopped sending me offers.
All of them offer all of the online things. I was with online-only State Farm for a long time, but I kept the credit union account open so I could go someplace to get a quarters, a free cashiers check, a free notary, etc. I’ll continue to keep it open.
I’d like to pop in here to put in a word for your credit union. All credit unions are not created equal, of course, so it depends on the services they offer, interest they pay, convenience, and things like that. And if your credit union isn’t very good, there are probably others in your area you qualify to join, depending on where you live.
The priceless part is knowing that you are not a customer who counts as nothing, but a part owner. I smile every time I think of that.
Here’s a boring illustration, so don’t read it if you don’t want. Recently we changed ownership of our bank accounts from ourselves personally to our living trust. I bank with a credit union, I filled out a form, signed it, and turned it in. My husband banks with a large, heartless and soulless institution. We had to make an appointment to see a special guy, and then we had to dribble out the information to him orally so he could enter it into a computer, and then ask us impertinent questions about our home finances. When I objected he admitted that the information was not pertinent to the change, and just put some numbers in. When we walked out I was like Carl in Casablanca, patting all my pockets to make sure they hadn’t been picked. OK, figuratively.
Treasury yields have dropped to almost nothing. 0.10% all the way out to 2 year maturity. So assume pretty much zero interest from any kind of “safe” fund like this for the forseeable future.
I’m getting 0.8% from a Goldman Sachs Marcus account (FDIC insured). Nowhere close to the 2.something% I was getting a while back, but certainly better than zero.
If any of these places used proper two factor authentication I’d switch to them immediately. The best any of them offer is SMS based two factor, which is better than a plain password, but only barely.
0.01% interest for checking and savings. The only real benefit is that I don’t have to change my direct deposits and withdrawals, except for when I do have to change them; some of them will update automatically, others won’t (a summary of the letter they sent). I can also keep my old checks.
Even moving to the credit union gets me a money market at 0.30%
Oh, for the good old days. Who here remembers the wild days of the early 1980’s when a 6-month CD fetched 14% (yes, you read that right)?
There’s a theoretical advantage to NOT keeping all you money in one institution. What if you ever have any kind of dispute with them over a mortgage payment, or a (possibly) fraudulent transaction, or a simple data entry error on their part?
First, you lose access to all the disputed money, at least until the dispute is resolved. Even if it’s purely an error on the bank’s part, you might expect it to take a few weeks to get fixed, and in the meanwhile you don’t have access to your money.
Worse, if you have multiple accounts at one institution, they could put a hold on ALL your accounts if they think you owe them money on one account, or they could use their “right of offset” to help themselves to money out of one account to pay any alleged deficiency in another account.
A friend once advised me to keep my money in several different accounts at different institutions just as a protection against these kinds of possible events. Then, if an account gets frozen for whatever reason, even if it’s only temporary, I still have access to money in other places.
Chase looks to be the easy answer here for the sign up bonus. The Fidelity expense ratios are high - are the returns net of the expenses or not? I know you don’t want to do this, but moving to another online bank that pays 0.8% on savings seems to be a better alternative, but it’s still a poor return. That is cash these days - all alternatives suck, so probably not worth worrying over.
I’ve practiced what Senegoid mentioned for the last 20 years - multiple accounts, multiple institutions, some with online access, others not. I’ve never really had an issue where I needed to rely on the redundancy this provides. I still do it though, because one of the accounts is at a large national bank that always seems to screw something up.
Yeah, I have multiple institutions. The goal is to not have a redundancy of multiple institutions. I don’t see anything that US Bank offers that I wouldn’t rather get from my credit union.
What I’m looking for is a place to keep my working capital–a checking account. My investments are at Fidelity, and if my checking account bank was inaccessible for some reason, I could use the Fidelity cash or sell some investments to get by while sorting out the trouble at the bank. I can see that as a reasonable argument to not use Fidelity as my checking account. It would mean that getting locked out of Fidelity for some reason would severely limit my options.
FZFXX and SPAXX are just the money market options at Fidelity where cash is held. Any other investment product is available for things that don’t need to be immediately liquid.
I wouldn’t even consider Chase, except they happen to be servicing my mortgage, so they keep trying to give me $500.
So yeah, @Dag_Otto, the best course is to go with Chase and take the signup bonus. After six months reevaluate, and if Chase has treated me poorly, move the checking to the credit union. Regardless, I need to be much better disciplined about moving excess cash out of the checking/savings and into investments. I should be able to hold a 3-6 month emergency fund in something safe, liquid within a business day, and earning more than 0.01% interest.
I guess it’s time to login to State Farm and make a list of all the automatic deposits and withdrawals.
Me neither. But one reads of the occasional horror stories. I have two checking accounts at different banks and a savings account at one of those banks. My retirement account is at a different place. I also have several credit card accounts, all at different banks.
What I want now is a credit card that still offers a virtual card number option for on-line shopping. One of my cards (BofA) had this but discontinued it. Someone on this board said Citi still has it, but when I went there, they said it had just been discontinued.
I used to use that all the time, but it seems to have gone away. I know my Fidelity Visa, which at the time was FIA Card Services, used to have it, but does not anymore. To put in perspective how long ago that was, the number was generated through a Flash application.
I can only think of one fraud instance in which it would have helped me. A merchant who I had made a legitimate online purchase from (Tivo, because I’ll name names) made an unauthorized charge, because a customer service rep was at best incompetent, but probably lied just to get me off the phone. They charged me full price for failing to return a product I’d already paid for, never intended to return, and then were slow about refunding the miss-charge.
Anyway, my most recent fraud (a whole month after the Tivo incident) was the traditional type where my card was used at a store I was not at. I like to pretend it was from a gas station skimmer, because it happened a day or so after I got gas; my only non-chip purchase. If it really was from a gas station skimmer, then the temporary number thing would not have helped.
So it seems there have been several banks that offer credit cards with virtual card number service for on-line purchases – but they’ve all eliminated that service fairly recently.
