Personal Finance Topics / Retirement Investing
No. of Recommendations: 7
None of the garbage hoops to jump through like banks that require direct deposit and 10+ debit card purchases every month to get the high rate.
At Fidelity.
1) Open a brokerage account, select SPAXX (the default) as the core position for un-invested cash. SPAXX is currently yielding 5.00%. All your "checking account" deposits go to that account, where Fidelity will put the money into SPAXX.
2) Open a Cash Management Account (CMA), get a checkbook and ATM card.
Select self-funded overdraft account to be that brokerage account.
Also select that account to be the low-balance funding source.
Set the low balance trigger to $10.
When you write a check which causes an overdraft, Fidelity instantly pulls the shortage from the brokerage account, which will pull it from SPAXX.
When your balance is below the low-balance amount ($10) at the end of the day, Fidelity will pull enough (minimum $250) from the brokerage account, which will pull it from SPAXX.
Damn clever way to earn Treasury rates on your checking account balance.
To guard against theft/fraud, do not have any substantial investments in that brokerage account. Maybe just a couple of SPY shares.
No. of Recommendations: 1
This is a good tip, and the CMA has decent interest rates too, in case you leave a little $$$ sitting in there.
I'm not 100% sure but I think the CMA also reimburses ATM fees It's too bad the debit card has a foreign transaction fee, or this would make it useful for getting cash abroad (Schwab's ATM card has no FTF and works well for this, but that won't not come up often for most folks).
No. of Recommendations: 0
It's kinda weird. The debit card for a CMA reimburses ATM fees, but the debit card for an investment account does not. But they are both legally brokerage accounts.
The Fidelity Visa charge card has no foreign transaction fee. And 2% cash back.
No reimbursement of ATM fees on a debit card on a Bloom account.
No. of Recommendations: 2
Yeah it’s not been hard for me to find a credit card without FTFs, but it’s a bit more of a unicorn to have zero FTF on a debit card that also reimburses you for all ATM fees.
If you’re traveling to countries where cash is still king, it’s a pretty great combo and the best way to get pesos — or whatever — for no fee. But not a great reason to choose your everyday checking account.
Currently I have way too many accounts so I really like your Fidelity combo. Might just have to keep another account active for the travel thing. Probably smart to have a dedicated account for that anyway.
No. of Recommendations: 0
Fidelity really doesn't mind you having a lot of accounts. They were recently pushing their Bloom accounts, giving $100 bonus for a $50 opening deposit, and the Bloom is TWO accounts.
