How would you feel if someone told you “no”? A little sad, right? How would you feel if someone told you “no, no, no, no”? (That was four nos, in case you lost count.) Really sad? A bit dejected, perhaps? But what if I told you “no monthly maintenance fees, no minimum balance requirements, no ATM fees, and no foreign transaction fees”? Interested? Allow me to introduce you to Charles Schwab Bank’s Schwab Bank High Yield Investor Checking Account. (HYIC)

Although the HYIC Account isn’t a particularly new product, having been launched over 12 years ago in 2007, it was designed to cater to the needs and tastes of young adults and the under-40 demographic.

Advantages of Schwab Bank High Yield Investor Checking Account

Schwab Bank High Yield Investor Checking Account offers HYIC accountholders a range of benefits, including free chequebooks for life and full integration with other Charles Schwab bank and brokerage accounts. Read on for details about the HYIC Account’s main perks.

Easy Account Opening

The HYIC Account can be opened online in about 10 minutes and all that’s needed is a mailing address, an ID, and a whopping minimum opening deposit of one penny, or $0.01.

No Fees

In a world where all the major banks charge fees, often even to just maintain a balance, Charles Schwab Bank’s HYIC Account is virtually feeless. There is no minimum balance is required to keep the account active, nor are there any monthly maintenance or account fees. Free overdraft transfers can also be set up by linking an eligible Charles Schwab account.

Interest Paid on Balances

Whether or not the balance of your HYIC Account is $0.01 or $50,000, account holders currently receive an interest rate, or APY, of 0.37%. (For more details on APYs, check out our March post on savings accounts.)

Online and Mobile Banking

Charles Schwab Bank offers HYIC accountholders free online and mobile banking (including mobile deposit) through its App Store and Play Store Schwab apps.

Schwab Bank Visa® Platinum Debit Card

Schwab Bank High Yield Investor Checking Account holders also enjoy another huge perk—the Schwab Bank Visa® Platinum Debit Card. To make up for not having its own ATMs, Charles Schwab Bank generously offers not only free ATM withdrawals at any ATM worldwide but also unlimited ATM fee rebates on cash withdrawals anywhere in the world. How does it work? Let’s say you have a checking account and linked debit card from Alpha Bank. You’re spending the weekend in a town where Alpha Bank has no ATMs and need to withdraw $100 cash, so you go to a Beta Bank ATM. Since you’re using an Alpha Bank debit card to withdraw from a Beta Bank ATM, your account can be charged by both Alpha Bank (for using a non-alpha Bank ATM) and Beta Bank (for using their ATM with a non-Beta Bankcard). With the HYIC Account and Schwab Bank Visa debit card, Charles Schwab Bank will not charge your account the first fee (known as an out-of-network fee) and will refund any charges to your account from other banks or ATMs (known as surcharges) in one lump sum, at the end of every month. And, to put the icing on the cake, there are no foreign transaction fees for using the Schwab Bank Visa debit card overseas.

Great Customer Service

Charles Schwab offers accountholders excellent, 24/7/365 U.S.-based telephone and live chat customer service. I can personally attest to the excellence of Charles Schwab Bank’s customer service team—two years ago, I accidentally left my Schwab Bank Visa debit card in an ATM while travelling abroad. By the time I realized my mistake, my card was gone—either taken by another user or kept by the ATM itself. I was thousands of miles away from home and, despite the time difference, I was quickly able to reach a friendly Charles Schwab Bank account specialist, who cancelled my lost debit card and had a replacement card shipped to me by FedEx, while I was travelling and to a foreign address—all at no extra charge to me. If that’s not the definition of excellent customer service, then I don’t know what is.

Disadvantages of Schwab Bank High Yield Investor Checking Account

While there are a lot of great things about the Schwab Bank High Yield Investor Checking Account, it’s not perfect and does have its drawbacks.

Brokerage Account Required

A Charles Schwab Schwab One® Brokerage Account is required when opening the HYIC Account and closing this account (without closing your HYIC Account) may result in fees being charged to your HYIC Account. While there’s no requirement to do anything with the Schwab One® Brokerage Account (like the HYIC Account, it has no monthly maintenance fees or minimum balance requirements) it must exist alongside the HYIC Account and will appear whenever you log onto your online and mobile banking.

Interest Rate

When compared to the Chase Sapphire Checking, Citigold® Interest Checking, or Portfolio by Wells Fargo® accounts, the HYIC Account’s 0.37% APY is definitely not a disadvantage; however, if you’re in the market for an interest checking account, Charles Schwab Bank’s rates are easily beaten by Ally Bank’s Interest Checking Account, which offers account holders a 0.6% rate on balances of at least $15,000.

Few Incentives to Maintain High Balances

Depending on the combined balances of your checking and savings accounts, as well as any credit cards and mortgages that you might have, Portfolio by Wells Fargo® and Chase Sapphire Checking to offer many of the benefits of the HYIC Account (notwithstanding the interest rate) with the added perks of brick-and-mortar branches and ATM deposits.

No International Wires or IATs

The Schwab Bank High Yield Investor Checking Account can only receive domestic wires and is not capable of receiving international ACH transactions (IATs). International wires cannot be initiated through Charles Schwab Bank and international wires can only be received into a Charles Schwab brokerage account (albeit through an intermediary bank, potentially resulting in extra fees and delayed processing times).

Other Considerations

Funding the Account

Herein lies the conundrum. You need to have a bank account with another bank in order to open the HYIC Account. Although Charles Schwab does maintain brokerage branches, these branches generally do not handle cash and the opening deposit is typically made through a bank-to-bank transfer initiated online when applying for and opening the account. After account opening, the HYIC Account can be funded by direct deposit, bank-to-bank transfer, or mobile deposit. (Money orders and checks can also be mailed to Charles Schwab and later credited to your account.) That said, it’s not possible to make ATM deposits and Charles Schwab brokerage branches generally offer limited support.

Limited Support from Charles Schwab Brokerage Branches

As mentioned above, Charles Schwab’s brokerage branches are legally not banks and generally do not handle cash. Their activities are more focused towards brokerage account customers and their staff is usually unable to support with Charles Schwab Bank accounts and products.

No Rewards Associated with the Schwab Bank Visa® Platinum Debit Card

Although debit card rewards (e.g. points, promotions) have become rare these days, there are still a few banks that offer them, and Charles Schwab Bank, unfortunately, isn’t one of them.

That’s it! We’d say the advantages of this account certainly outweigh its disadvantages but let us know what you think! Perhaps Charles Schwab Bank High Yield Investor Checking Account is the right account for you!

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