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Checking accounts are a staple for most consumers since they provide an easy way to receive direct deposits from an employer as well as a quick method to spend on purchases or pay bills. Because of their transactional nature (meaning money flows in just as quickly as money flows out), most checking accounts pay minimal interest during a statement period. With the boom of online banking, however, some financial institutions have taken to enhancing their checking account offerings to stay competitive. This Charles Schwab High Yield checking account review will look at the fees, minimums, and a bevy of features not found with comparable checking accounts.
The Charles Schwab High Yield Investor checking account is made available through Schwab Bank to consumers who have already established or are willing to create a Charles Schwab One brokerage account. The High Yield Investor checking account does not impose any fees for depositing funds or transferring between the brokerage account and the checking account, nor are there monthly account maintenance or service fees attached to the account. Account holders do not have to meet a minimum deposit requirement to be eligible for the account or the 0.13 percent APY variable interest rate currently offered on the account.
All account holders must submit an application for a Charles Schwab High Yield Investor checking account either online or over the phone. The application requires the following information before approval is granted:
- Account holder’s social security number
- Driver’s license number
- Employer’s name and address if employed
- Home address and mailing address if different
- Date of birth
- Charles Schwab brokerage account number if already established
Additional information may be required if a brokerage account is being created at the same time the High Yield Investor checking account is opened. Details about the account holder’s investment experience, the source of account funding, and number of transactions per year are part of the brokerage application. Once a new High Yield Investor checking account is established, account holders can transfer funds to and from the account as much or as little as they wish.
Benefits With a Charles Schwab Account
In addition to the higher interest rate of 0.13 percent offered on the High Yield Investor checking account, Charles Schwab also provides a variety of added benefits to account holders. As a checking account, the High Yield Investor account comes with a debit card connected to the account as well as personal checks if requested. The use of Schwab Bank ATMs is free of charge to checking account holders. Schwab Bank also offers bill pay through mobile devices or online at no additional fee.
All High Yield Investor checking account holders are not charged foreign transactions fees on purchases made outside the United States on their debit cards, and no fee for a debit card replacement is assessed (when sent via regular mail). Transfers between a Charles Schwab One brokerage account and the High Yield Investor checking account do not carry a fee, nor do transfers to or from checking or savings accounts held with outside financial institutions. Charles Schwab also offers free mobile check deposits via its mobile application, free online banking to view account details, pay bills, or transfer funds, and FDIC insurance on up to $250,000 per bank account with the same ownership type. The High Yield Investor checking account also allows account holders to set up direct deposit of paychecks into the account as well as automatic transfers into or out of the account.
While the High Yield Investor checking account has a higher interest rate than some comparable financial institutions, the 0.13 percent can change at any time based on broad market interest rate movements. Additionally, account holders are required to establish and keep in good standing a Charles Schwab One brokerage account to remain eligible for the fee-free checking account. The brokerage account offered by Charles Schwab does not impose fees for account opening or transfers, but trading fees for investments may be assessed.
Account holders have access to other transfer services common with other financial institutions, including outgoing bank wires and cashier’s checks. However, each outgoing wire carries a fee of $25, while cashier’s checks cost $10 per check. Any checks written from a High Yield Investor checking account that is returned to the bank due to insufficient funds is charged a $25 fee and deposits that are returned incur a $5 fee. Currently, only online individuals and joint account holders are eligible for a High Yield Investor checking account with Charles Schwab; business, trust, and IRA registrations are excluded from opening an account.
Author: Jeff Gitlen