When you hear the name Charles Schwab, you probably think of investing. But did you know the discount brokerage also has a banking division?
Here’s What You Need to Know About Schwab Bank
In this article, we’ll take a look at what Charles Schwab offers in banking, how you can access the money in your account, how much interest you can earn and more.
Table of Contents
- What Is Schwab Bank?
- What Kind of Bank Accounts Does Schwab Bank Offer?
- How Do I Withdraw Money From My Schwab Bank Account?
- How Do I Add Money to My Schwab Bank Account?
- How Do I Get in Touch With Customer Service?
1. What Is Schwab Bank?
Schwab Bank is simply the banking of arm of the Charles Schwab Corporation. Schwab opened his company, initially a brokerage firm, in the early 1970s.
Schwab Bank likes to call itself “the bank for investors” in its marketing materials — and that’s true. In fact, to get a Schwab Bank checking account, you must have a brokerage account with the firm. So you’ve got to be an investor to be a banking customer.
In addition to traditional banking products (checking and savings), Schwab Bank also offers home loans via Quicken Loans and a pledged asset line (PAL). The PAL is a line of credit you can use for real estate, business or college expenses, and it’s based on the value of your portfolio’s assets.
2. What Kind of Bank Accounts Does Schwab Offer?
Schwab Bank has two kinds of accounts:
- High Yield Investor Checking
- High Yield Investor Savings
High Yield Investor Checking
The High Yield Investor Checking account has no monthly fees and offers unlimited ATM rebates worldwide when you use your debit card. However, its name is somewhat misleading, because it pays a rate of interest only nominally higher than the big banks.
You must have a Schwab One brokerage account to link to your High Yield Investor Checking account.
So if you’re an existing brokerage customer, you can go ahead and open this checking account right now. But if you’re a new customer, you’ve got to open both the brokerage account and the checking account simultaneously.
The nice thing is that neither account has a minimum, so you don’t need big bucks to get started with this checking account.
But take note: Schwab will do a hard inquiry on your credit when you apply to open the checking account.
Other perks of this account include free checks and no foreign transaction fees. That last one, coupled with the unlimited ATM rebates worldwide, makes this checking account a good option if you frequently travel internationally.
Finally, Schwab offers extended FDIC insurance coverage of up to $500,000 on your money.
High Yield Investor Savings
The High Yield Investor Savings account also offers unlimited ATM fee rebates worldwide when you use your debit card and no monthly service fees or account minimums.
But again, the name is something of a misnomer: It pays a rate of interest that’s only nominally higher than the big banks.
In fact, it’s entirely possible to find rates that 20 to 25 times higher than what Schwab offers with any of the banks on our list of 8 of the Best Savings Accounts.
Unlike the High Yield Investor Checking Account, this savings account does not require you to link it to a brokerage account at Schwab.
The money in your High Yield Investor Savings is FDIC-protected up to $500,000 thanks to that extended FDIC insurance coverage.
3. How Do I Withdraw Money From My Schwab Bank Account?
Schwab Bank is different from other online banks in one important way. With most of the competition, you have to figure out which fee-free ATM network they’re a part of and then track down a participating ATM to avoid paying a surcharge.
But that’s not the case with Schwab because the bank absorbs all ATM fees on both its savings and checking accounts. So you can use your debit card at any ATM, and you’ll be reimbursed for any fees you get charged.
The same holds true even when you’re traveling internationally. That makes pulling money of your accounts very easy no matter where you are.
4. How Do I Add Money to My Schwab Bank Account?
Adding money to your Schwab Bank account is also easy. There are several options no matter which of the two accounts you have:
- Direct deposit
- Mobile check deposit
- By mail
- Wire transfer from another financial institution
- Transfer funds from your Schwab brokerage account
You can also transfer funds from your High Yield Investor Checking account to your High Yield Investor Savings account, according to Schwab.
5. How Do I Get in Touch With Customer Service?
Once you’re logged into your Schwab Bank account online, there are several ways to get in touch with customer service:
- Live chat
One of the easiest ways is by phone: 888-403-9000.
Schwab Bank is built with investors in mind, but it won’t pay you a lot of interest. That said, if you just want to simplify your financial life, it might make sense to do your checking and investing at the same place.
Here’s a recap of the pros and cons:
|No ATM fees worldwide||Low rates of interest on both savings and checking|
|No minimums||Must be a brokerage customer to open a checking account|
|No foreign transaction fees||Hard inquiry on your credit to open a new account|
Ultimately, if Schwab Bank doesn’t work for you, another online bank might. Be sure to read our piece on the Best Online Banks to see what’s available.