Picking a Bank...

[pplooker]

I do a Harry Browne kind of thing, and have accounts at multiple instituitions.  The "main" one that I use all the time however is at a local bank with a small local footprint that isn't in the habit of selling its notes to larger banks or other such things.  That said, it's not the most profitable bank either.

If I could ever completely stop writing paper checks, I'd get rid of one account.

ING Direct, Compass, Local Bank, those three are it for now.  I've heard the Schwab checking account is pretty good too.

[ahhrunforthehills]

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[Storm]

More and more I'm considering making Fidelity my main bank of choice.  I haven't yet started using them for checking, but they have some advantages:

1.  Fidelity Retirement Rewards American Express - 2% cash back on ALL purchases, 4% from some merchants (like Apple Online Store), no catches, no blackout dates, no limitations.  2 points for every dollar, points can be redeemed in 5000 point increments for $50 deposit into any other Fidelity account, including your IRA or brokerage account.

2.  Choice of 3 different default options for the "cash" portion of your portfolio (you can always buy your own ST treasuries if you want) - FDRXX (money market) - FGRXX (US short term treasuries) - FDIC cash sweep, which is where they intelligently "sweep" the cash portion of your portfolio into multiple FDIC insured institutions, taking care to stay below insured maximums.  For example, if you had $1 mil in the cash portion (I can only wish) they would sweep $240K into each of 4 different FDIC insured banks (staying below the $250K government insured amount) and put the remaining $40K in a 5th bank.

The only thing making me hesitate between moving all of my accounts there is the counter-party risk of having all your eggs in one basket.  Other than that, they've been a pleasure to work with, and I get the feeling that their customer service genuinely appreciates that you have a lot of choices about where to keep your retirement money.

I'm sure Vanguard has similar services, but I haven't used them yet.

[Jan Van]

I'm sure Vanguard has similar services, but I haven't used them yet.

Vanguard's banking services don't look as comprehensive as Fidelity's. Vanguard does offer VanguardAdvantage, with direct deposit, checkwriting, online bill payment and a Visa debit card. Haven't really looked into it that much yet...

[Hobbery]

Ahhrunforthehills-  Thanks for that writeup.  I went to Charles Schwab website to look at checking account details but it appears to be an "Investor checking" account that has to be linked to a Brokerage account (which apparently has no minimum balance).  However I can simplify my checking though, I think I should.

Pardon me if this is a stupid question, but what is USAA..?

And where did you find the bank ratings on TheStreet.com...? 

You guys are giving me a lot of helpful material.  I really do appreciate it.

[ahhrunforthehills]

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[Gumby]

Pardon me if this is a stupid question, but what is USAA..?

USAA is an excellent bank. Here's why:

 http://banksimple.com/blog/2010/03/21/t ... in-the-us/

You can view bank rankings here: http://www.thestreet.com/bank-safety/index.html.

Finding a "A" or "B" bank with a descent yield is not an easy find.  In fact I went through a list based on highest yield and ran it through the ratings.

Am I missing something? Those ratings are just unexplained letters. They could mean anything. It all depends on the criteria.

BankRate (free) and Bauer Financial (fee) are much more useful for bank ratings. Not only do they rate each bank, but they provide detailed financial statement about the balance sheets and risks of each bank (including borrowings, overhead, total assets, net income, return on investments, mortgaged-backed securities, etc, etc).

[ahhrunforthehills]

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