Schwab High-Yield Investor Checking

Jeff Mancuso May 28th, 2008

Since graduating college, I’ve been a fairly happy Bank of America checking account holder. There are an absurd number of BofA ATMs in Boston and a reasonable number of branches. However, there is a $750 minimum balance requirement that sort of grinds on me – mostly because the account makes no interest. New checks cost a ridiculous $25, which I am forced to pay nearly every year as I move around.

A few months ago I saw an ad for Schwab High-Yield Investor Checking. It advertised 3% interest, no minimum balance, all ATM fees [domestic and international] refunded. It seemed too good to be true – but Schwab is a respectable name, so I gave it a good look and opened an account.

This is a great deal. It’s not too good to be true, and there isn’t a catch.

  • 2.01% variable APY – [about 5x the national average]
  • No minimum balance requirement
  • All ATM fees are refunded [both domestic and international]
  • Free bill pay
  • Free checks
  • Overdraft protection
  • Built in brokerage account [with reasonable trading fees]

The major downside is that you won’t be able to interact with a real person at a local branch, although they have 270 investment branches you can supposedly go to for service. Apart from that, it’s pretty nice. The website isn’t quite as pretty as the BofA site, but is certainly just as functional.

For an even higher interest rate, Jon keeps all of his money in the the [dubiously named] Bank of Internet USA, which is currently yielding 3% on a $1,000 minimum balance. I’m not too sure about that one.

  • http://gtcaz.com Geoff Cheshire

    Thanks for the tip — I recently opened a similar account at ING Direct. The Electric Orange account is similar to your Schwab account, though I opened an Orange Savings Account which pays 3% interest, which comes highly recommended and would choose over the “Bank of Internet USA” on name alone.

  • http://gtcaz.com Geoff Cheshire

    (Man, seems I need to proofread before I hit the submit button.)

  • Jeff Mancuso

    @Geoff – I think Electric Orange requires > 50k in the account to get that 3.2% APY

  • http://gtcaz.com Geoff Cheshire

    Right. I still have my regular checking account at Wells Fargo, but moved my savings to ING Direct. I’ve got so much direct deposit and direct debit stuff wired into my WF account that it’d be hard to move. What’s really nagging me about the WF account is the $10 monthly fee for online bill-pay and Quicken integration.

  • http://aaron.gy Aaron Gyes

    A few credit unions around here have “rewards checking” accounts with a 6.01% interest rate on up to 25K. It’s pretty sweet. The downside is you must do 10 debit card transactions per month, but I do that anyways. I think they get money from VISA.

  • Tony Roberts

    Coulee Bank ( http://www.couleebank.net ) offers an incredible 6.01% APY with their Rewards Checking account. The rate is easy to earn. All you have to do is make 10 check card transactions a month, use e-statements, and do 1 automatic payment a month (they call it ACH). Coulee Bank pays 6.01% on the first $25,000 and 1.01% on anything above that. The best thing about this account besides the rate is it is FREE, you can apply online, and it is from a great bank with real people that answer the phone. And as they like to say, Banking Green has its Rewards. The Rewards Checking account saves paper and preserves our natural resources. No wonder I feel good about recommending this to everyone I know. Check it out. I guarantee you will love it.

  • Aryn

    So what happened to the 3% they advertised? I thought there was a 3% offer from Schwab but I haven’t been able to find it.

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