Schwab Review: Best Choice for Personal and Business Banking
To date, more and more banks are going online. Gone are the days wherein you have to line up to accomplish transactions with a bank teller. Nowadays, you can quickly cash in, transfer, and pay bills through a few clicks anytime and anywhere from around the globe. With this on hand, online banks have slowly become a reality due to its convenience and accessibility. If you still aren’t using an online bank, the chances are high that you will - sooner or later.
Knowing what to look for in an online bank is essential for every consumer. Of course, you need a bank that can support your financial goals while keeping up with your lifestyle. For instance, when transitioning to an online bank, you should expect fewer fees than brick and mortar banks. You should also look out for quality customer support, excellent security features, enhanced flexibility, and smooth onboarding.
One of the most popular online banks today is Schwab Bank. In this blog, we’ll give you a closer look at Schwab Bank’s background, offerings, features, perks, and other things to expect from this online banking service. At the end of this blog, we hope you’ll get a good understanding of whether Schwab Bank is the right choice for you now or in the future.
About Charles Schwab Bank
If you’re familiar with Charles Schwab Corporation, you must know that the company offers a comprehensive set of solutions in securities, brokerage, banking, money management, and financial advisory services. One of these is Schwab Bank, which serves as its official arm for banking. Charles Schwab Bank started in 2003. In 2007, it launched its High-yield Checking and Savings accounts. Schwab Bank also gives its users multiple options to save and competitive home lending rates.
Exclusive Perks with Schwab Bank
If you want seamless integration between saving and investing, then Schwab Bank is worth considering. With Schwab Bank, you get exclusive perks, including Mortgage rate discounts, Unlimited ATM fee rebates worldwide, Free online and mobile bill pay, Competitive APY with Schwab Bank’s checking account, and no application or set-up fees for Pledged Asset Lines.
There are two types of accounts that you can choose from, namely: High Yield Investor Checking and High Yield Investor Savings.
High Yield Investor Checking Account
This kind of account is an FDIC-insured account that offers generous interest rates and debit card perks. What we love most about Schwab Checking Account is that it has no minimum balance requirements, and it provides unlimited ATM fee reimbursements domestically and abroad – making it a perfect choice for frequent travelers and digital nomads out there.
Here are the top perks of having a Schwab Checking Account:
- APY of 0.15% on your checking account balance
- No minimum amount required to open
- No monthly charges
- Worldwide coverage: Zero foreign transaction fee when you use your Visa Debit card anywhere
- Fast check deposits with your mobile device
- Pay your bills online effortlessly for both one-time and recurring bills through its Online Bill Pay System
- Free check orders upon account activation
Overall, Schwab’s Checking account enables you to do a bit of everything, including depositing funds, making payments, and earning interest while avoiding unnecessary charges. On top of this, Schwab Checking Account is a smart choice if you’re looking at investing and saving your money in one place.
Unlike other banks, Schwab’s Checking account doesn’t have transaction limits, so you’re free to spend unlimited amounts for your debit card expenses, checks, and online bill payments – making it the perfect choice for your everyday financial needs.
Schwab’s Investor Savings Account
Unlike Schwab’s Checking account, the High Yield Investor Savings account isn’t the best. This kind of online bank account pays a moderate interest rate, so don’t expect to grow your money exponentially. Schwab’s Saving account offers a relatively low interest rate of 0.18% APY as compared to other banks. However, the silver lining comes in terms of its zero-charge ATM withdrawals if you’re a frequent traveler.
Aside from the things mentioned above, here are the other perks you’ll get with Schwab’s Savings Account:
- Unlimited ATM rebates
- No monthly maintenance fees
- No minimum deposit required
- No current balance requirement
Another perk of having Schwab’s Savings Account is you get to have ATM withdrawals directly from your Savings account. Other banks usually require you to transfer funds to a different account to make ATM withdrawals.
Best Bank for Foreign transactions
While Schwab Bank doesn’t have a global network of surcharge-free ATMs, withdrawals done through other ATMs globally is still free. This benefit is possible due to Schwab’s policy on unlimited ATM fee reimbursements. It essentially means that Schwab will reimburse you of all ATM withdrawal charges that you have incurred worldwide.
There’s only a handful of banks that do this, so this is already a huge plus, especially for backpackers who want to avoid unnecessary charges. To add to this, Schwab Bank also stands out as the right choice for frequent travelers with its $0 foreign transaction fees.
Superior Customer Support
Charles Schwab Bank offers exceptional Customer support. The bank was recently awarded the 2019 J.D. Power U.S. Direct Retail Banking Award for its excellent customer service. Having stellar customer support gives you peace of mind that in case you encounter any account issue or problem, you’ll always have someone ready to help.
In terms of customer support channels, Schwab offers a 24/7 chat support and phone support available from 4 a.m. to 8 p.m. PT on weekdays and 6 a.m. to 7:30 p.m. PT on weekends. In terms of social media presence, you can also get in touch with them through their Twitter account.
Schwab Bank employs industry-standard security features to protect its account holders. While data breach is possible everywhere, using industry-standard security can help prevent unauthorized access and attacks on its systems. Thus, ensuring privacy security for its users.
To add to this, you can also activate the Voice ID and Two-factor authentication features to secure your account further.
How to start Banking with Schwab Bank?
To start an account with Schwab Bank, you’ll need to secure the following requirements:
- Complete name of the account holder
- Social Security Number (SSN) or Tax ID Number (TIN)
- Account holder’s full address
- Contact details: Email & Phone number
- Mother’s maiden name
- Employment information
- Government-issued identification card with a validity date
- Marital status
- Source of funds for the account
- Estimated frequency of deposits, transfers, and withdrawals
Having a Schwab One Brokerage account is required for you to be able to open a Schwab Checking account. Thus, you’ll need to submit additional requirements as required by securities industry regulations which include:
- Income range bracket
- Background in terms of investments
- Liquid net worth details
- Investment objectives
- Financial goals for the account
Once approved, you can easily fund your account through direct deposit, mobile check deposit, wire transfers, ACH transfers using your linked bank account or direct transfers from other Schwab accounts. However, it’s worth noting that upon application, Schwab Bank will conduct a hard inquiry on your credit standing.
Another thing that we love about Schwab Bank is its transparency in disclosing its charges.
Schwab Bank’s charges are pretty decent and competitive with other banks. Details are listed below:
- Cashier’s check: $10 per check
- Outgoing wire transfer: $25
- Returned deposit: $5 each
- Debit card rush delivery: At least $15
- Insufficient fund fees: $25 each, maximum of 4 items a day
On the other hand, these transactions are free of charge – stop payment, paper checks, debit card replacement, and overdrafts from another Schwab account.
What we don’t like about Schwab Bank
Even though Schwab Bank proves to be a rational choice for many, it still has a fair share of drawbacks. For starters, we’re not excited about how it pulls a hard credit for new account applications. Another one is the relatively low-interest rate for Schwab’s Investor Savings Account compared to other online banks. Lastly, if you live in the suburbs, it might also be worth noting you can only find Schwab Bank branches in major cities, so getting to one might be challenging, especially if you’re from the suburbs.
Who should use Schwab Bank’s services?
Schwab Bank is a perfect choice for people who already have an existing account with Charles Schwab’s brokerage services. Other potential customers include frequent travelers who are heavy ATM users, consumers who want an excellent interest checking account, and those who wish to engage with a well-known brand.
However, if you don’t fall into any of the categories mentioned above, you are also a potential Schwab Bank account holder if you’re looking for an online bank with the following perks:
- Unlimited ATM fee rebates for domestic and foreign ATM withdrawals
- No foreign transaction fees
- Has a mobile app to access your funds anywhere and anytime
- Save and invest in one platform
- Superior Customer Service
Do we recommend Schwab Bank?
Overall, we recommend Schwab Bank for frequent travelers, who want to manage their investments and savings in one place, and for consumers who wish to a high-yield interest checking account without the need to deposit cash regularly. What sets Schwab Bank apart is the unlimited ATM fee reimbursements and $0 monthly fee for its account holders. For the High Yield Investor Checking Account, Schwab’s APY also proves to be economical for checking accounts, especially since it has no minimum requirement. On top of this, you also get superb accessibility, security, and reliability through its mobile app, industry-standard security features, and superior customer service.
How about you? Have you tried Schwab Bank? Leave us a comment below!
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