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Charles Schwab Bank Review: What Makes This Online Bank Stand Out

If you are looking for a digital bank that offers a stellar checking account, at the same time, free use of any ATM, and does not require you to deposit regularly, then you better read through this Charles Schwab Bank review.

Charles Schwab Bank Review: What Makes This Online Bank Stand Out

Wondering why?

Well, apparently, Charles Schwab Bank is providing all that to their customers. This Charles Schwab Bank review, however, will give you more information you need to see if this, indeed, is the right mobile bank for you.

A report published by Statista, says that in 2018, there was about 61 percent of American people used digital banking. Experts project that the population of digital bank users will increase to 65.3 percent by 2022.

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Meanwhile, an article by Forbes, says that while “digital banking had been moving mainstream, particularly for younger Americans, consumers of all ages have now hopped on board“.

So, what are we trying to say here?

Well, as you can see, these reports/studies show that digital banking has indeed become a necessity over recent years particularly in the last year when the country and the world faced one of the hardest times in history.

Moving forward, digital banking does not seem to be slowing down rather only rising – with people of all ages leaning towards it as compared to traditional banking (or have both).

Anyway, what we are trying to point here is that since there is an increasing demand for digital banking platforms, it opens up more opportunities for digital banks to come to life, which is good because it gives customers more choices.

Among the digital banking platform choices out there right now is Charles Schwab Bank, and today, we are going to particularly focus on this digital bank. Will look into what it has to offer, and what makes it right for you.

In this Charles Schwab Bank review, we are going to specifically tackle and provide answers to the following commonly asked questions about the bank:

  • What is Charles Schwab Bank?
  • Who is Charles Schwab Bank best for?
  • What are the products offered by Charles Schwab Bank?
  • How to do banking with Charles Schwab Bank?
  • Is Charles Schwab Bank safe?
  • What to like about Charles Schwab Bank?  
  • What not to like about Charles Schwab Bank?

WHAT IS CHARLES SCHWAB BANK?

Before we go into more detailed information about the products and services that the bank offers, as well as other equally important information, let’s take a look at the bank’s history or who and what the bank is all about.

Remember, as a customer, it is your responsibility to know your bank first before you even open an account. This helps you build trust and confidence knowing you are putting your money in the right, reliable place.

Moving on, here’s a quick briefer on what Charles Schwab Bank is all about —

Charles Schwab is more popularly known as an investing platform. However, it does also offer checking and savings options under Charles Schwab Bank, which is an online bank. Additionally, the bank also offers other banking services like home loans and an asset line of credit.

Charles Schwab has been part of the country’s financial landscape for more than 40 years now. With that on their shoulder, it’s safe to say that customers can rely on its stability and trustworthiness.

Although we are going to particularly focus on the Charles Schwab Bank (the online bank) today, just to give you an overview, the brokerage firm offers various investment accounts (should you need them in the future), which include stocks, bonds, mutual funds, annuities, ETFs, and a lot more.

Moreover, the firm also offers multitudes of retirement account options like Traditional IRAs and Roth.

While Charles Schwab Bank is purely online, Charles Schwab Co. has over 360 brokerage branches, which are mostly concentrated in California, Connecticut, and Arizona.

If you want to know more about Charles Schwab Bank, check this video out:

WHO IS CHARLES SCHWAB BANK BEST FOR?

When choosing a bank, it is important to do a self-assessment first. You ask yourself what you are specifically looking for, what product or service do you need, and more. Doing so will help trim down your choices – especially these days when there’s a lot to choose from.

Now, in this part of our Charles Schwab Bank review, we are going to share with you who this bank is ideal for.

Charles Schwab Bank is known as the “bank for investors”. This alone should give you a hint on who the Charles Schwab Bank is ideal for.

Technically, the bank should appeal to customers who hope to move money between various types of accounts — not just savings or checking, but also brokerage.

More so, Charles Schwab Bank may also be a good fit for people who want to earn valuable interest on their checking account, travel abroad and access their money without having to pay expensive ATM and foreign transaction fees, receive unlimited ATM fee rebates, and that the bank is also ideal for those active investors who want a combination of liquidity, $0 equity trades, as well as over 13 different investment products.

So, if you are looking for or you are any of these, then Charles Schwab Bank may just be the right choice for you.

WHAT ARE THE PRODUCTS OFFERED BY CHARLES SCHWAB BANK?

In this part of our Charles Schwab Bank review, we are going to look into the products offered by the bank.

Charles Schwab Bank currently offers the following bank accounts and services:

  • Savings Account
  • Checking Account
  • Certificates of Deposit (CDs)
  • Credit Cards

Now, let’s take a look at each of these:

Savings Account

One of the accounts offered by Charles Schwab Bank is its Schwab Bank High Yield Investor Savings account.

This account earns a 0.05% annual percentage yield (APY), which is well below other online savings accounts rates.

Although that is the case, what’s nice about the Schwab Bank High Yield Investor Savings account is that it does not require a minimum opening deposit, does not require a minimum balance, has unlimited ATM fee rebates worldwide, allows mobile check deposits, does not charge service fees, and of course, all savings accounts are FDIC-insured up to $250,000.

Unlike other online banks, Charles Schwab Bank provides several options when it comes to opening an account. Customers may opt to fill out and submit an application via mail, in person at a Schwab branch, or upload online (this option, however, is only applicable for existing customers).

Meanwhile, customers can make deposits to their savings accounts through any of the following choices:

  • Direct deposit
  • Fund transfer from Charles Schwab brokerage account or checking account
  • Mobile deposit through the mobile app
  • Wire transfer from another financial institution
  • Mail a check to Charles Schwab Bank

Although other digital banks may offer better rates as compared to what Charles Schwab Bank offers, the bank’s High Yield Investor Savings account may still offer a better rate as compared to other local brick-and-mortar banking out there.

Checking Account

Another product option offered by Charles Schwab is its Schwab Bank High Yield Investor Checking account.

While there is nothing extreme about this checking account, customers could earn 0.03% APY.

What makes the Schwab Bank High Yield Investor Checking account stand out from other checking accounts offered by other online banks is that when you open one, you automatically get a Schwab One brokerage account as well. This makes it not ideal for those who are not interested in opening a brokerage account.

Moving on, the Schwab One brokerage account comes with free standard checks as well as a Schwab Visa Platinum Debit Card. Since it is part of the Visa family, the debit card is accepted almost anywhere in the world, making it an ideal choice for travelers as well. Needless to say, when you use it outside the United States, you are free from foreign transaction fees.

Furthermore, another very notable perk of the Schwab Bank High Yield Investor Checking account is that it provides unlimited ATM fee rebates worldwide, which means wherever you go, you will always get reimbursed for any ATM fees you have incurred. The funds are usually received at the end of the same month in which you were charged ATM fees.

Similar to its savings account, Charles Schwab Bank’s checking account does not have account minimums requires as well as service fees.

As with opening an account, the same applies to its checking account as its savings account. Customers may opt to open an account online or by filling out and mailing a paper application. Just the same, you may also opt to drop by a local Schwab branch near you.

To make deposits, you may also opt to do any of the following ways:

  • Direct deposit
  • Fund transfer from Charles Schwab brokerage account
  • Mobile deposit through the mobile app
  • Wire transfer from another financial institution
  • Mail a check to Charles Schwab Bank

For those who already have a Charles Schwab brokerage account, it is important to note, though, if you have a brokerage account that comes with a debit card as well as check-writing and bill pay capabilities when you open a checking account, all of those featured are automatically transferred to your checking account, and will no longer be available with your brokerage account.

Certificates of Deposit (CDs)

Here’s the thing, Charles Schwab acts as a virtual middleman for various CDs from other banks. Customers can use the Schwab CD OneSource online to compare rates and terms, as well as to purchase CDs.

Unfortunately, the CD rates are far lower as compared to what you’ll get from other online banks.

For CDs, deposit start at $1,000 and increase in $1,000 increments. The terms range from a month to 20 years. A notification will be sent to you once your CD reaches maturity so you get to access your funds and reinvest into a new CD if you want to.

If you are going to open a CD account, it is important to note that the bank includes a selling concession in new issue CDs for online and broker-assisted trades. A $1 transaction fee per $1,000 CD is charged for secondary trades, while broker-assisted ones are charged the online price of $25 per trade service charge.

Similar to both checking and savings accounts CDs are FDIC-insured at each bank for up to $250,000. Also, you may opt to extend your FDIC coverage by purchasing CDs across multiple banks through Schwab.

Credit Cards

Charles Schwab per se offers two credit cards only — one is a premium credit card called Schwab Investor Card from American Express, which is ideal for investors, and the other one is a travel credit card called the American Express Platinum Card for Schwab.

HOW TO DO BANKING WITH CHARLES SCHWAB BANK?

In case you did not notice, earlier we already mentioned how to open an account particularly on Charles Schwab Bank’s savings and checking accounts.

Again, to open either a savings or a checking (or both) accounts, you may choose from several options, which include filling out and submitting an application via mail, in person at a Schwab branch, or upload online.

Meanwhile, to make an initial deposit or future deposits for that matter, you may do so through the following ways:

  • Direct deposit
  • Fund transfer from Charles Schwab brokerage account or checking account
  • Mobile deposit through the mobile app
  • Wire transfer from another financial institution
  • Mail a check to Charles Schwab Bank

IS CHARLES SCHWAB BANK SAFE?

With over 40 years of existence in the brokerage industry, Charles Schwab has, for sure, mastered ensuring the safety and security of their customers’ accounts.

The Charles Schwab online bank per se comes with the latest encryption technology, Voice ID, notifications and alerts, and card lock/unlock features to ensure the security and safety of their customers’ accounts.

Furthermore, Charles Schwab also has a security guarantee in place, providing 100% coverage of any losses in their customers’ bank accounts due to unauthorized activity.

Also, the bank is FDIC insured, which means should it fail, the federal government will pay up to $250,000 per customer.

WHAT TO LIKE ABOUT CHARLES SCHWAB BANK?

Now, we already tackled what Charles Schwab Bank is, who it is for, the products and services it offers, as well as how to do banking with them.

In this section of our review on Charles Schwab Bank, we are going to share with you a summary of the things we like about the bank.

This includes the following:

  • No Monthly Maintenance Fees – Contrary to other online banks, Charles Schwab Bank does not charge monthly maintenance fees for both checking and savings accounts.
  • No Minimum Opening Deposit Required – This is probably one of the things we love the most about Charles Schwab Bank. You can open an account anytime without having to worry about an opening deposit requirement.
  • No Minimum Balance Required – Another thing to love about Charles Schwab Bank’s savings and checking accounts is the fact that it does not require any minimum balance.
  • Unlimited ATM Fee Rebates Worldwide – Charles Schwab Bank is an ideal bank for constant travelers as it offers unlimited ATM fee rebates from all over the world.
  • Mobile Check Deposit – Another feature that not all online banks offer, but Charles Schwab Bank does.
  • High Yield Checking Account – Although it’s not as high as other mobile banks out there, the rates are still competitive considering the other perks you get from the bank.
  • Free Overdraft Transfers from Linked Accounts – With Charles Schwab Bank, you do not have to worry about overdraft transfer fees as it is free.
  • Free Investment Account with Checking Account – Once you open a checking account, you automatically get a brokerage account as well.
  • FDIC-Insured – Both savings and checking accounts of Charles Schwab Bank are FDIC insured, which means, in case of bank failure, depositors can get up to $250,000 from the federal government.

WHAT NOT TO LIKE ABOUT CHARLES SCHWAB BANK?

While there are a lot of things to like about Charles Schwab Bank, it does sure have a few downsides as well.

To help you decide if Charles Schwab Bank is the right bank for you, take a look at these disadvantages as well. It includes:

  • Below-Average APY on Savings Account – As mentioned earlier, if compared to other online banks out there, the APY offered on the Charles Schwab Bank savings account is not that competitive.
  • No Money Market Accounts – Unfortunately, unlike other banks of a similar type, Charles Schwab Bank does not offer money market accounts. So, if you are looking for one, you may check out other digital banks instead.
  • No Banking Services at Charles Schwab Branches – Although Charles Schwab has over 360 brokerage branches across the country, these branches do not provide banking service, which is actually understandable as Charles Schwab Bank is an online bank, and technically speaking, the bank is different from the brokerage (which they are really known for, by the way).
  • A Linked Brokerage Account is Required for the Checking Account – If you want a sole checking account only, Charles Schwab Bank may not be the right one for you, because the bank’s checking account automatically comes with a brokerage account.
  • No ATM Network – Although Charles Schwab Bank provides a Visa debit card, the bank does not have its own ATM network.

FINAL THOUGHTS ON CHARLES SCHWAB BANK REVIEW

Surely, there are lots of online banks out there and Charles Schwab Bank is only one of them.

While the other banks may have better offerings as compared to what Charles Schwab Bank has to offer, it surely does have some features that are unique to it — one of them is when opening a current account, you automatically get a brokerage account as well.

Overall, we have to say that Charles Schwab Bank is ideal for people who are into brokerage at the same time, want to save up for a fair enough rate.

To end, we hope that this Charles Schwab Bank review has provided you with all the essential information you need. More so, we hope we are able to help you decipher if this online bank is the one that fits you.

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