Fidelity vs Schwab CMA

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hotelcalifornia
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Fidelity vs Schwab CMA

Post by hotelcalifornia »

I’ve used USAA as my main bank for my entire life but the experience has gone downhill over the past 5 years and I’m ready to switch.

Main feature I’m wanting is a high-yield savings/MM option I can use alongside a checking/cash management account. Have seen many others here recommend the Fidelity one-stop-shop option but before I pull the trigger and move everything over I wanted to see if anyone here recommends Schwab CMA over Fidelity or even some other bank. Is the potentially “free” Schwab Amex Plat as good as it sounds?
UpperNwGuy
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Re: Fidelity vs Schwab CMA

Post by UpperNwGuy »

Schwab has its own bank with checking and savings accounts, so it is not the same as Fidelity's CMA. I don't think there is a high yield savings account, but you can quickly move funds to your associated brokerage account and then manually purchase a money market fund.
PaunchyPirate
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Re: Fidelity vs Schwab CMA

Post by PaunchyPirate »

I'm am a relatively new Schwab customer. I have a regular bank checking account with them (Schwab Bank). It came with a debit card and a checkbook. I have it "linked" to a Schwab brokerage account. I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.

The debit card rebates any bank fees from international withdrawals from the checking account. That is a major reason I signed up for this account.
williammacy7
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Re: Fidelity vs Schwab CMA

Post by williammacy7 »

Something that doesn't get mentioned in Fidelity vs Schwab one-stop-shop style threads -- Schwab Bank is regulated like an actual bank i.e. by Federal Reserve Board and CFPB. So when things go south (and I hope they don't), you have someone to go to. Fidelity CMA is legally a brokerage account and thus only regulated by FINRA (which is a joke, if you have ever dealt with them). So the auto-sweep stuff to MMFs comes at a cost.

As an example -- Fidelity itself doesn't directly provide protections against check-fraud (their customer protections guarantee doesn't apply here), instead they route to a claims process with UMB Bank (their partner bank which runs the underlying banking operations of a CMA). You can read more about it here -- https://www.fidelity.com/security/custo ... -guarantee.

Another wonky thing about CMA -- their monthly statements are practically undecipherable, which makes sense because it's a brokerage account. Schwab checking statements are much more mainstream.
Last edited by williammacy7 on Sat Apr 01, 2023 5:08 pm, edited 2 times in total.
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hotelcalifornia
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Re: Fidelity vs Schwab CMA

Post by hotelcalifornia »

PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
PaunchyPirate
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Re: Fidelity vs Schwab CMA

Post by PaunchyPirate »

hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm
PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Very good point on the checking interest rate. I only keep $5 in the checking account normally. My plan is to move $5000 into that account to have available when I travel to Europe in May, just in case I need it. Then the day I get back home, I will transfer anything left back to the MMF in the brokerage account.
CletusCaddy
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Re: Fidelity vs Schwab CMA

Post by CletusCaddy »

hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm
PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Don’t forget about Merrill Edge CMA which has an Insured Savings Account paying 2.92% eligible for automatic sweep.

https://olui2.fs.ml.com/Publish/Content ... eSheet.pdf
jackal
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Re: Fidelity vs Schwab CMA

Post by jackal »

I was recently debating this as well and decided to go with a fidelity brokerage account- I just hold enough to pay bills and the interest rate of 4% is neat. I believe other than the types of protection, one can do the same thing with both a cma and a brokerage account.
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anon_investor
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Re: Fidelity vs Schwab CMA

Post by anon_investor »

CletusCaddy wrote: Sat Apr 01, 2023 6:00 pm
hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm
PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Don’t forget about Merrill Edge CMA which has an Insured Savings Account paying 2.92% eligible for automatic sweep.

https://olui2.fs.ml.com/Publish/Content ... eSheet.pdf
How so you get access to the Insured Savings Account at ME?
CletusCaddy
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Re: Fidelity vs Schwab CMA

Post by CletusCaddy »

anon_investor wrote: Sat Apr 01, 2023 6:31 pm
CletusCaddy wrote: Sat Apr 01, 2023 6:00 pm
hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm
PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Don’t forget about Merrill Edge CMA which has an Insured Savings Account paying 2.92% eligible for automatic sweep.

https://olui2.fs.ml.com/Publish/Content ... eSheet.pdf
How so you get access to the Insured Savings Account at ME?
I assume Merrill service rep would know
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anon_investor
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Re: Fidelity vs Schwab CMA

Post by anon_investor »

CletusCaddy wrote: Sat Apr 01, 2023 6:48 pm
anon_investor wrote: Sat Apr 01, 2023 6:31 pm
CletusCaddy wrote: Sat Apr 01, 2023 6:00 pm
hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm
PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Don’t forget about Merrill Edge CMA which has an Insured Savings Account paying 2.92% eligible for automatic sweep.

https://olui2.fs.ml.com/Publish/Content ... eSheet.pdf
How so you get access to the Insured Savings Account at ME?
I assume Merrill service rep would know
I guess it is like the Preferred Deposit then and will require a call.
CletusCaddy
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Re: Fidelity vs Schwab CMA

Post by CletusCaddy »

anon_investor wrote: Sat Apr 01, 2023 6:52 pm
CletusCaddy wrote: Sat Apr 01, 2023 6:48 pm
anon_investor wrote: Sat Apr 01, 2023 6:31 pm
CletusCaddy wrote: Sat Apr 01, 2023 6:00 pm
hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm

Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Don’t forget about Merrill Edge CMA which has an Insured Savings Account paying 2.92% eligible for automatic sweep.

https://olui2.fs.ml.com/Publish/Content ... eSheet.pdf
How so you get access to the Insured Savings Account at ME?
I assume Merrill service rep would know
I guess it is like the Preferred Deposit then and will require a call.
Nope it’s a sweep account, no call required.

https://www.mymerrill.com/Publish/Conte ... dy_ADV.pdf
Topic Author
hotelcalifornia
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Re: Fidelity vs Schwab CMA

Post by hotelcalifornia »

williammacy7 wrote: Sat Apr 01, 2023 5:06 pm As an example -- Fidelity itself doesn't directly provide protections against check-fraud (their customer protections guarantee doesn't apply here), instead they route to a claims process with UMB Bank (their partner bank which runs the underlying banking operations of a CMA). You can read more about it here -- https://www.fidelity.com/security/custo ... -guarantee.
This is a very good point I didn’t consider before. So will Fidelity reimburse fraudulent debit transactions and check fraud? The FAQ on their website is pretty vague on that.
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anon_investor
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Re: Fidelity vs Schwab CMA

Post by anon_investor »

hotelcalifornia wrote: Sat Apr 01, 2023 8:19 pm
williammacy7 wrote: Sat Apr 01, 2023 5:06 pm As an example -- Fidelity itself doesn't directly provide protections against check-fraud (their customer protections guarantee doesn't apply here), instead they route to a claims process with UMB Bank (their partner bank which runs the underlying banking operations of a CMA). You can read more about it here -- https://www.fidelity.com/security/custo ... -guarantee.
This is a very good point I didn’t consider before. So will Fidelity reimburse fraudulent debit transactions and check fraud? The FAQ on their website is pretty vague on that.
You might want to checkout the Fidelity One Stop mega thread, someone might have posted about that there or know.
viewtopic.php?p=7199999#p7199999
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hotelcalifornia
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Re: Fidelity vs Schwab CMA

Post by hotelcalifornia »

PaunchyPirate wrote: Sat Apr 01, 2023 5:59 pm Very good point on the checking interest rate. I only keep $5 in the checking account normally. My plan is to move $5000 into that account to have available when I travel to Europe in May, just in case I need it. Then the day I get back home, I will transfer anything left back to the MMF in the brokerage account.
Just curious, if you only keep $5 in your checking account how do you handle bill payments and direct deposits? Do you just use your brokerage account for all that?
PaunchyPirate
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Re: Fidelity vs Schwab CMA

Post by PaunchyPirate »

hotelcalifornia wrote: Sun Apr 02, 2023 10:48 am
PaunchyPirate wrote: Sat Apr 01, 2023 5:59 pm Very good point on the checking interest rate. I only keep $5 in the checking account normally. My plan is to move $5000 into that account to have available when I travel to Europe in May, just in case I need it. Then the day I get back home, I will transfer anything left back to the MMF in the brokerage account.
Just curious, if you only keep $5 in your checking account how do you handle bill payments and direct deposits? Do you just use your brokerage account for all that?
I mentioned it in an earlier post, but this checking account is not my primary checking account. I will be using this account to hold money that I use while on international travel only. So I will put more money into it before a trip -- then use the free ATM transactions to get cash while on the trip -- then remove all but $5 from the account when I get back -- lather, rinse, repeat as trips happen. I don't do any bill pay or direct deposits with the account. I have another account at PNC Bank where I do that.

I do this because of the free ATM withdrawals + I like to compartmentalize the money in case my debit card is lost or stolen or hacked while abroad.
BogleMelon
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Re: Fidelity vs Schwab CMA

Post by BogleMelon »

I would love to hear more stories on comparing both accounts in terms of customer service especially when issues arise. CFBP would step in for unresolved issues with Schwab but they wouldn’t deal with Fido since the later is not a bank. That is why I am considering moving my main checking account to Schwab (I had a minor unresolved issue with Fidelity a month ago and was kind of disappointed in their CS)
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
vaylie
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Re: Fidelity vs Schwab CMA

Post by vaylie »

hotelcalifornia wrote: Sat Apr 01, 2023 8:19 pm
williammacy7 wrote: Sat Apr 01, 2023 5:06 pm As an example -- Fidelity itself doesn't directly provide protections against check-fraud (their customer protections guarantee doesn't apply here), instead they route to a claims process with UMB Bank (their partner bank which runs the underlying banking operations of a CMA). You can read more about it here -- https://www.fidelity.com/security/custo ... -guarantee.
This is a very good point I didn’t consider before. So will Fidelity reimburse fraudulent debit transactions and check fraud? The FAQ on their website is pretty vague on that.
Checkwriting Terms & Conditions (PDF)
If you believe any statement you receive contains any errors or discrepancies, including, without limitation, forgeries, alterations or other unauthorized transactions, you agree to notify Fidelity immediately by phone and follow-up in writing. You must report any errors or discrepancies to Fidelity within 30 days of your receipt of the statement, or, if notice regarding the availability of the statement is delivered to you electronically, within 30 days after Fidelity sends you a notice that the statement is available through Fidelity’s online service. You must identify the particular transactions that you consider having an error or discrepancy. If you do not notify Fidelity within the required period of time, the statement will be deemed to be correct, and all transactions shown on the statement will be deemed to have been properly charged, and you may not make any claim against the Bank and/or Fidelity for any transaction on the statement that you believe is incorrect, unauthorized, forged, altered or improperly paid. You agree that neither the Bank nor Fidelity will be liable if you fail to exercise ordinary care in examining your statements. You further agree that the Bank and Fidelity do not fail to exercise ordinary care if t h e Bank pays a Check that was altered or forged in such a manner that a reasonable person would not be able to detect the alteration or forgery.
Debit Card Agreement (PDF)
You must tell BNY Mellon AT ONCE if you believe your Card has been lost or stolen or if you believe an unauthorized person may know your PIN. Telephoning is the best way of keeping your possible losses down. You could lose all the funds in your Account (plus your maximum overdraft line of credit). If you tell BNY Mellon within two (2) Business Days after you learn of the loss or theft of a Card or PIN, you can lose no more than fifty dollars ($50.00) if someone used your Card or PIN without your permission.

If your Account statement shows Transactions that you did not make, tell BNY Mellon at once. Similarly, tell BNY Mellon immediately if you think your Account statement or Transaction record is wrong or if you need more information about your Transaction listed on the Account statement or Transaction record. If you do not tell us within sixty (60) calendar days after the Account statement was FIRST mailed to you, you may not get any money you lost after sixty (60) days if we can prove that we could have stopped someone from taking the money if you had told us in time. If a good reason (such as a hospital stay) kept you from telling us, we will extend the time period.

Except as otherwise stated in this Agreement, we will determine whether an error occurred within ten (10) Business Days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to forty-five (45) calendar days to investigate your complaint or question. In this event, we will generally re-credit your Account within ten (10) Business Days for the amount you think is in error so that you will have use of the money during the time it takes us to complete our investigation. However, margin Accounts need not be re-credited during our investigation. If we ask you to put your complaint or question in writing and we do not receive it within ten (10) Business Days, we need not re-credit your Account or we may reverse any credit previously made to your Account.
So any debit card issues it seems you'll be dealing directly with BNY Mellon. Checkwriting is less clear.

From a practical standpoint, Fidelity is pretty active on social media/reddit (public shaming works very well!), and pretty responsive customer service wise. I am not particularly worried about the ramifications of fraud. I also have the following security measures enabled at Fidelity beyond the basics like 2FA:

- Money Transfer Lockdown locks down outgoing ACH, outgoing ACATs, non-automatic/recurring withdrawals.
- Debit Card Lock should minimize your risk for debit card fraud, as it will block everything except subscriptions/refunds/credits.
- Checkwriting is trickier - I kind of wish I never enabled it because apparently you can't disable or terminate the feature. The main way to mitigate damage here is to keep a minimal amount of money in your "exposed" account that you use for checks or that you give out for direct debits. And keep the bulk of your savings in another brokerage account that you can use to fund your CMA.
beezlebub
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Re: Fidelity vs Schwab CMA

Post by beezlebub »

BogleMelon wrote: Sun Apr 30, 2023 2:24 pm I would love to hear more stories on comparing both accounts in terms of customer service especially when issues arise. CFBP would step in for unresolved issues with Schwab but they wouldn’t deal with Fido since the later is not a bank. That is why I am considering moving my main checking account to Schwab (I had a minor unresolved issue with Fidelity a month ago and was kind of disappointed in their CS)
This is exactly why I moved from Fidelity to Schwab. I don't feel like dealing with BNY Melon when something goes wrong with Fidelity's debit card -- too many third parties involved in what should be a direct relationship. Fidelity is fine until it isn't, as is the case with most fintech products.
beezlebub
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Re: Fidelity vs Schwab CMA

Post by beezlebub »

A new interesting incident of fraud and Fidelity/UMB's response: https://www.reddit.com/r/fidelityinvest ... raud_case/
zie
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Re: Fidelity vs Schwab CMA

Post by zie »

CletusCaddy wrote: Sat Apr 01, 2023 6:00 pm
hotelcalifornia wrote: Sat Apr 01, 2023 5:33 pm
PaunchyPirate wrote: Sat Apr 01, 2023 2:56 pm I keep that brokerage account fully invested in SWVXX, the Schwab Value Advantage Money Market fund, which currently is earning about 4.68%. As far as I can tell, I must manually initiate an action to move money between the brokerage account and the linked bank account. I don't think there is any sort of automatic movement to cover checks that you write. I believe Fidelity does this automatic movement to cover checks. I don't see this as a problem, because I manage my accounts closely and can just move money between the accounts when I need to. This is also not my primary checking account, but I don't see any reason it couldn't be. I will primarily use it for international travel.
Yes, automatic fund transfers to cover transactions at Fidelity is nice for peace of mind but probably not necessary for most here. One benefit I do see for Fidelity over Schwab is that FDIC APY for cash management is 2.47% at Fidelity while Schwab checking is 0.45% currently.
Don’t forget about Merrill Edge CMA which has an Insured Savings Account paying 2.92% eligible for automatic sweep.

https://olui2.fs.ml.com/Publish/Content ... eSheet.pdf
I think the BOA/ME system only makes sense if you have $100k or more you can deposit there and are willing to be very boring. Their system is really hard to beat if you can fit that narrative: you get up to 5.25% cash back on credit cards, free BOA checking account and a CMA account @ ME that really isn't bad. You need to be boring though. You can't buy fancy unique/new ETF's or anything of the sort, and BOA can be annoying to deal with if you want to do anything even remotely exciting (i.e. anything more than writing checks, paying bills and using their CC cards). If you ever want to do anything beyond boring, open an account at some other bank, because chances are BOA will make a mess of it or make it so annoying it won't be worth the hassle.

Between Fidelity/Schwab, I only have experience with Fidelity. I have no complaints, but one of my family members had their account locked and it took them about 30 days to get it all sorted and unlocked, so 1-stop shopping @ Fidelity only works if you have another account somewhere else, in case they get upset with you. For me that's BOA/ME, but I'm happy being boring and letting them hold $100k of my assets. My checking account is usually under $100 and my CMA account has 1 holding, AOA.
Whether rich or poor, a young woman should know how a bank account works, understand the composition of mortgages and bonds, and know the value of interest and how it accumulates. -Hetty Green
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