Optimizing brokerage xfer bonuses & cashback credit card perks

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Morik
Posts: 1329
Joined: Tue Nov 25, 2014 11:26 am

Optimizing brokerage xfer bonuses & cashback credit card perks

Post by Morik »

I am looking to take advantage of some brokerage xfer offers and combined brokerage perks, and wanted to get feedback on whether there are any good offers out there that I missed.

Me + spouse both have IRAs at vanguard currently.

We currently use a 2% cashback credit card and spend roughly $60k per year on it. (We have 5% for Amazon but otherwise just use the 2% card for everything.)

We would like to get Merrill Edge/Bank of America platinum honors 2.625% cashback. No maintenance fee BOFA account is a minor bonus--we don't currently bank with any non-online banks, there are lots of BOFA nearby.

Option 1:
- Xfer both IRAs to Schwab. They are both > $100k which should net a $500 xfer bonus. Schwab's FAQ indicates multiple people in the same household can each get the bonus.
- After the Schwab bonus holding period expires and we can move accounts again without losing the bonus (1 year, I believe), move both accounts to Merrill Edge. With the current bonus program that would net $250 on spouse's IRA (>$100k, < $200k) and $600 on mine (> $200k, < $500k).
- Once at Merrill, switch credit cards to use BOFA's 1.5% cashback card (+75% from platinum honors) for a total of 2.625% back.
- Total bonus should be $1850 to Roth IRAs.

Option 2:
- Both IRAs to Merrill. Keep there until bonus period is up (so can xfer out without revocation of bonus). Then both IRAs to Schwab.
- I would send my taxable brokerage account to Merrill to maintain platinum honors for the 2.625% cashback card.
- Total bonus should be $1850 to Roth IRAs.

Option 3:
- Like option 2, but instead of Schwab, IRAs end at Ally Invest. Ally bonus is $300 for spouse's IRA, $600 for mine.
- Ally invest pays the IRA close-out fee from Merrill Edge.
- We have an ally savings account so that integration is nice, though I have our savings in a different bank right now for higher interest--0.75% at LendingClub Founders club.
- Total bonus would be $1750 to Roth IRAs.

Option 4:
- Combine option 2 & 3. IRAs start at Merrill, before xferring them out put taxable at Merrill to maintain Plat honors. Next they go to Schwab or Ally invest. Then move them again to whichever one I didn't move them to yet.
- Total bonus: $2750 to Roth IRAs.
EDIT: Actually there is a better Merrill offer, instead of $850 ($250 on spouse IRA, $600 on my IRA), it looks like we could get $400 on spouse, $1000 on mine by maintaining preferred rewards status (and having personal BOFA checking account). So $3200 total bonus to Roth IRAs.

For any account closing/IRA xfer out fees, I would pay those out of pocket if they aren't paid by the receiving brokerage (AFAIK Ally will pay for us if I'm xferring there.)

In the meantime I plan to get the $500 M1 bonus for taxable accounts ($50k+ ACH xfer), and then once that lands & the holding period expires, move the taxable account to Merrill.


I am not sure which of the 3 brokerages I would prefer to end up at. I don't do anything complicated--just passive index ETFs. My guess is that it won't really matter to me. I find Vanguard's system fine for my needs, and from what I've read Vanguard's is considered pretty clunky. Given that we already have an ally savings account, it probably makes sense to end up there rather than Schwab.

Anything I'm missing? I'd be especially interested in cashback credit cards with similar payout to platinum honors + bofa cash rewards (2.625%).
One option is Alliant--to get 2.5% cashback you have to maintain a checking account with > $1k balance & 1 e-deposit per month.
We currently have our checking account at USAA. We do like free checks (my spouse likes physical checks better than online bill pay), and no fee on incoming wires.
Going with Alliant checking would be an alternative to Merrill Edge platinum honors, and Alliant's is a high interest checking account (currently 0.25%) which is nice given we maintain $10k-$25k in the checking account generally.
However, if I was going to go through the effort of switching checking accounts, I'd also consider Ally since we have a savings account there.
Both Ally & Alliant have no fee for incoming wires. Ally has free checks, it appears Alliant doesn't.


Writing all this out helped me get my thoughts in order. Looking over it, I am leaning towards doing option 4 and using Merrill Edge plat honors for the 2.625% bofa cashback card. I would leave my checking at USAA, but could consider swapping to Ally checking in the future.
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