The Schwab/Credit Union Combo

Several months ago, I opened an online checking account with Charles Schwab, and I have to say, they’ve got a great thing going on. Let me be clear: in these times of financial crises and corporate banking bailouts paid for with tax dollars, I think our privatized, corporate banking system is at the heart of much of our financial problems. Regardless of politics, though, there’s a lot of reasons to hate the huge banks strictly from the standpoint of a consumer and customer service.

I can’t stand fees. Getting charged fees for stupid things that you shouldn’t be charged for is whack. I use another bank’s ATM, I get charged a fee. I travel in another country and use my debit card, I get charged an international fee. If I don’t maintain a minimum balance in my account, I get charged a fee.

Why would companies that make millions and billions in profits and get bailed out by the government and the people’s tax dollars continue to nickel and dime their customers, the people that sustain them and that they depend on? To hell with them, I say.

A better option I’ve found for myself, is to set up two checking accounts. One is Charles Schwab’s High Yield Investor Checking. No ATM fees, no international fees, no minimum balances, and I’ve tested this out myself. The account is completely online, so you don’t go to a physical bank building to withdraw money from your account. Instead, once you sign up and they send you your VISA debit and ATM card, you simply use your card at any ATM anywhere and any fees that you get charged with by the ATM or bank is reimbursed into your checking account at the end of the month. No more of having to go to your specific bank branch because you can only withdraw money from those ATMs or face getting charged a fee from another bank or the ATM at the store down the block from you. You also receive a small amount of interest on your checking account, so they’re actually paying you. Much appreciated, Chuck.  Furthermore, they open a brokerage account for you that can be linked to your checking account, so if at some point you want to start investing or open a retirement savings account, you can easily transfer money between your checking and brokerage (and gain access to a wide range of socially responsible investment funds that support companies who are adhering to strict environmental regulations and have great track records for labor relations and human rights).

Second, I’d open another checking account at a local credit union or community bank. Past articles show that The Cheddar Path loves credit unions. They are nonprofit organizations that are owned by their members, so any profits they make aren’t used to pay shareholders or for stupid, risky ventures like all that derivatives trading and predatory lending we’ve been hearing about in the headlines that have contributed to this whole global financial crisis thing. Plus, I like the security of knowing that if I need to cash a check asap, I can just go to my local credit union or community bank that I have an account with and get it done instead of having to send the check to Charles Schwab who deposits it into my account in 2-3 business days (I get my regular paychecks direct deposited into my Schwab account, but when you need to cash or deposit another check, Schwab gives you pre-paid envelopes that you put the check in and send to them). Furthermore, from a community based economics perspective, banking with a credit union means that you are helping people in your local community get mortgages or loans.

Bam, there  it is. Screw the big banks if they continue to nickel and dime their customers. The folks at Charles Schwab seemed to know this, as do the credit unions and community banks. Shouldn’t we support them with our dollars, instead?