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Banks have been really out to hurt the consumer – they have been levying outrageous fees, giving poor yields on savings accounts, and charging for basic services that used to be included with most accounts. Many people have been preaching the switch to credit unions – well, I’m arguing for the switch to accounts offered by your brokerage.
Brokerage Firms Are In The Banking Game
Many people don’t realize how involved brokerage firms are involved in the banking system. Just about every brokerage firm offers checking and savings accounts that are FDIC insured. They do this because they hope that by gaining one part of your business, that can convince you to use the other parts of their business (such as the investment aspects).
Beyond basic checking, some discount brokerage firms, such as Fidelity and Charles Schwab, have been offering credit cards with some of the best rewards out there. The catch is that you must deposit your rewards into an account with them. But don’t let that discourage you, as you can easily transfer the money out to your primary account.
Get To Know Free Again
The beauty of using a brokerage as a bank is that they offer most services that you’ve become accustomed to for free.
For example, these firms offer free checking, free checks for your account, free ATM withdraws, and more. You can also usually transfer funds both in and out of the account for free (where many banks don’t mind you transferring in, but charge you to transfer out).
These brokerage firms also usually have easy to use websites, since many don’t have locations for the banking services. Many offer you the ability to scan in your checks (like you’ve seen on commercials for Chase or USAA), as well as the ability to print checks from your computer.
If you’re looking for a free option for banking that is convenient and easy to use, check out your favorite discount brokerage firm.
Readers, what are your thoughts on using your broker as your main bank?
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This post was written by...
Robert – who has written 317 posts on The College Investor.
Robert is the founder and editor of The College Investor, a personal finance site dedicated to young adult and college student finances. You can learn more about him here and connect with him on Twitter or Facebook.
{ 11 comments… read them below or add one }
That is an option I haven’t considered. Since my checking is already free I don’t plan on switching but I’ll keep it in mind for the future.
I had an excellent credit card from Schwab and was earning 2% on everything and it could be deposited monthly into any of my accounts no matter the total. Unfortunately BOA took it over and it went down to 1% and can only be deposited in $25 increments. I usually try to stay away from the bigger banks for this very reason.
Yes, I had the same card, and I was so disappointed. Fidelity has a great card now that is very similar to the Schwab card.
So what happens when a check gets compromised and instead of just your checking account getting drained, now your stocks get sold and you loose those also.
Just because you have a checking account with a brokerage doesn’t mean your accounts are linked. In fact, it is usually very difficult to move funds between them.
If a check is stolen, you get the same protections you would get at your normal bank.
I will look into this…thank you
Huh, I’ve never even thought of doing this. I wonder if Zecco offers services like that. Although I have a dumb question: how do you get actual checks to them? Just through the mail?
You can do it two ways: many allow you to scan in your checks or take pictures (like the USAA and Chase commercials on TV), or you can mail them in using a postage paid envelope that they usually provide.
This is a pretty interesting idea. I might have to try it! My bank is definitely not on my good side lately.
-Ashley Morrissey
ashleymorrissey90(at)yahoo(dot)com
I use my MB Trading brokerage somewhat like interest checking account. Where I park my money, waiting for a market drop. I earn money market return on that money. never accessed their check facility though.
never tried it , will havto to look to this