mpkb said:Ivanist said:I belive they will move the money from S1 to your checking account if there's insufficient fund.
That good. But I guess if you forget to move the money yourself it will earn near zero in the brokerage account instead of the 4.25% in the checking.

Just to clarify - this is only for Schwab MoneyLink. If you have direct deposit wired for your Schwab checking account it will go directly there. If you do a push from another account into your schwab checking it will also go directly there. The only time this is an issue is when you are doing a pull into Schwab using moneylink, at which point it does not give an option to pull into the checking account but only the S1

Question for the experts:

SW2XX
Schwab Investor Money Fund™
Effective Yield: 4.86%
Current Yield: 4.75%
OER: 0.64%

So effectively, the yeild is 4.11%

Is that right? That is lower than the investor checking. Do you guys consider this a ripoff?

What are your comments and opinions?

markkundinger said:For mutual funds (including money market) operating expenses are already deducted when the yield is calculated.

So the MMF would have been yielding 5.x%, except it weren't for those damn expenses.

"Effective Yield" assumes reinvesting of dividends. Kind of like an APY compares to interest rate on bank accounts.

I have to disagree...at least your mutual fund part. I know for the fact that returns quoted by the MF companies are before fees and expenses. I am surprised that the OER is 0.64%. That is rather high!

From Schwab's prospectus on their Investor Money Fund (SWRXX): "‘‘Shareholder fees’’ are charged to you directly by the fund. ‘‘Annual operating expenses’’ are paid out of fund assets, so their effect is included in total return."

And to look at random other funds, here's from American Fund's Growth Fund of America: "Unless otherwise noted, fund results reflect any fee waivers and/or expense reimbursements in
effect during the period presented."

And from Vanguard's SP500 prospectus: "As is the case with all mutual funds, transaction costs incurred by the Fund for buying and selling securities are not reflected in the table, although such costs are reflected in the investment performance figures included in this prospectus"

The best way to witness this in effect is to compare year to year results for two index funds. One with a few low expense ratio, and one with a very high expense ratio. The one with the higher expense ratio will show lower "results" each year, by approximately the amount of the expense ratio gap.

i still didn't get my deposit slips, checks, or pre-paid envelopes.

I was curious...does anyone know if you can "customize" (select your own) person pin # for the debit/atm card?

Also, do you know if they have any plans to make it so that you would be able to do external ACH transfers to outside banks, directly to the Investor Checking Account (instead of on the "brokerage" side)....

thanks, clocks... (i like your "handle"....lol)

If you do not want to have funds sitting in the brokerage account any longer than necessary (say from having received Schwab-initiated incoming transfers), you can do the following: Have the CSR set your "target balance" level for your Investor Checking account as high as possible. ($100,000 is the max.) The "target balance tranfers" mentioned by markkundinger, will automatically sweep each day any funds from the brokerage to the checking account. This is in effect a nice way to initiate (from Schwab) an incoming transfer, and know it'll get to your Investor Checking automatically.

markkundinger said: Note that the bank can have three types of auto transfers with the brokerage account:

1) Scheduled daily, weekly, monthly, etc transfers of a particular dollar amount
2) Overdraft transfers, 1 per transaction
3) "Target balance transfers", where a daily transfer is made to keep the checking balance at a particular level.

Schwab's very helpful CSRs are your best bet. They could tell you at what time the daily "sweep" is set for. You could always have your target balance set lower than your intended ACH or brokerage use. Then a set balance in the brokerage acct. would be unaffected, e.g., Target Balance of $2000 means unhindered ACHs of up to $1999.99.

hoxbox said: What happens when you want to initiate ACHs out of the Schwab account? You transfer money manually into Brokerage account and then it automatically transfers money back?

Which Fidelity checking account are you referring to? I was looking at their website and couldn't find it. Also, how does it differ from Schwab other than automatic overdraft protection?