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?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.