The Charles Schwab Company got its start as an investment newsletter created in 1963 by Charles (Chuck) Schwab and two partners at the same firm. The newsletter was named Investment Indicator. By 1971, the firm had become a wholly owned subsidiary of Commander Industries, Inc. in the state of California. The company’s mission was to offer traditional brokerage services along with publishing the Schwab Investment newsletter. Soon after, Schwab and four partners acquired Commander Industries and changed its name to Charles Schwab and Company in 1973. Over the years, Charles Schwab has been a pioneer in the financial services field, being the first to offer bank accounts without minimum balance and maintenance fees. Today, Charles Schwab serves over 8.2 million client brokerage accounts, with more than $1.65 trillion in assets from over 300 offices in the United States, one office in Puerto Rico, one branch in London and one branch in Hong Kong.
Schwab Bank's main selling point is its no-fee account products and services. It offers a High-Yield Checking Account, High Yield Savings Account, Individual Retirement Account, Pledged Asset Loan and Home Equity Line of Credit with no fees to open or maintain and without hidden transaction fees. High Yield Checking Account:
The Schwab Bank High Yield Investor Checking account is only available when linked to a Schwab One brokerage account. The two accounts may be opened at the same time and will be linked, so customers can easily transfer funds between them to meet both their investing and checking needs. There is no obligation to use the Schwab One brokerage account, it just has to be an open account but customers can invest with Schwab brokerage at no additional cost.
Whatever the account balance, this High Yield Investor Savings account offers:
Charles Schwab bank also offers no-fee loans for varying purposes: Pledged Asset Line® (PAL) Schwab offers customers an immediate, flexible, non-purpose line of credit that leverages the value of their investments. This line of credit (PAL) can be used for anything from existing property renovation, real estate investments or to expand one's business. HELOC Loans Schwab Bank's HELOC program is provided by Quicken Loans, the nation's largest online mortgage lender, offering:
Schwab Bank offers three types of college savings plans:
ESA and 529 College Savings accounts have many advantages over custodial, general brokerage, and savings accounts. Any earnings in 529 plans and ESAs are free from federal income tax as long as they're used to pay for qualified education expenses. So the investment can grow faster than it would in a taxable account.
Schwab Bank does not charge any ATM fees and reimburses any ATM fee customers are charged worldwide. This means in situations that an ATM charges a fee, i.e. $3, customers can select 'Yes' and Schwab bank will refund that charge to their account. Any ATM fees charged by ATM operators will be refunded in the same month when using the Schwab Bank Visa® Platinum Debit Card. Schwab prides itself on seeing itself through clients' eyes-serving driven, motivated people who believe that personal engagement, a sense of ownership, and a commitment to investing gives them control over their financial futures. The Bank serves its clients with:
If a customer wants to enjoy the benefits of the no-cost Schwab Bank High Yield Investor Checking Account®, they will be prevented from doing so unless they have a linked Schwab One® brokerage account. Although the Schwab One brokerage account has no minimum balance requirements when opened with a linked High Yield Checking account, this may be daunting for individuals unseasoned in brokerage accounts and investing.
If someone just wants a checking account, this addendum may make opening a checking account with Schwab more trouble than it's worth. Although a customer may be eligible for an account at a regular bank (only requiring a photo ID and a social security number) they may not meet the requirements to open a Schwab brokerage account-which means they cannot open a Schwab High Yield Checking account.
There also exists a potential limitation for mobile customers looking to make direct deposits. Schwab Bank deposits are accepted only at Schwab Bank branches. Customers can make deposits from a mobile internet connection with Schwab's Mobile Deposit service; however, the service is subject to certain eligibility requirements and enrollment is not guaranteed. Having to come into a branch for a regular deposit can be inconvenient for those with busy schedules and who live far away from a nearby branch. That may be more feasible with a bank like Bank of America, which has branches in most cities every 20 miles, but to have to come in person to a Schwab branch for a deposit is inconvenient at best.
Accounts are advertised as "High Yield" when in reality the yield may not be high due to the fact that the High Yield Investor Savings account and the Checking Account both have a variable interest rate, so it may change as market conditions vary. When the interest rate of return is dependent on the market that makes the ROI vulnerable to market crashes.
Alicia Holman Gilbert, AZ
4 years ago