I'm considering simplifying my life by putting everything into Fidelity. I already have all my IRA's there and my company's 401k is there as well. So, I'm considering getting checking access for my brokerage account and getting a Fidelity Cash Back card and I'm done! But what would be the disadvantage of putting all of my money at Fidelity (or any other financial institution)? 1. Limited physical branches 2. I still have to go to other institutions for mortgage, for example.
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Consolidation may mean you might not be able to get a Fidelity credit card.
I also consolidated all my finances with one company, but when I decided move all my finances to Fidelity I couldn't because, Fidelity turn my application for their credit card down with the reason given that I do not have enough credit cards. (I have a 20+ year credit history with no negative marks at all in my credit history.)
Message edited by: BradMajors on 2009-10-27 23:27:58 CDT
miserly said:But what would be the disadvantage of putting all of my money at Fidelity (or any other financial institution)?
The biggest disadvantage is that you may lose money.
Fidelity has been my financial hub for almost 10 years, they're great. But I moved all my liquid cash out to get higher interest, and I got a Schwab VISA (2% Cash Back) along with brokerage (necessary to receive the cash rebates) and checking (debit card has higher withdrawal limits than Fidelity).
My advice is, sure, concentrate most stuff in one place you like, but be open to other opportunities as they arise. Online ACH is your friend.
I use fidelity MySmartCash for my banking, but I do keep excess cash in a HY Savings account elsewhere. MM rates are terrible right now and I don't want to take any risk with that money.
There's also the usual problem of consolidating everything in one place: while unlikely, there is some chance that your accounts will be frozen due to suspicious activity, fraud, or glitch. I would always recommend you have at least two checking accounts (even if one is some free checking that you just keep $1 in), and credit cards from at least two different issuers.
I wouldn’t have “everything” at one institution. I find life easier and less risk of bank issues by having accounts grouped together at different institutions.
For example, the majority of our long-term investments are with Vanguard. (These don’t get touched except to add new monies and occasional rebalancing). I have a different institution for everyday checking & mortgage. Another institution for playing around in the stock market, credit card & back-up checking. Another place as a backup credit card & dump my dollar coins, etc.
I also have most all my accounts with Fidelity and it has been wonderful. You can see everything in one screen, including the Fidelity AMEX and Visa cards on the main summary page. Transferring money is done instantly given it is all under the same company. I agree with having a high yield savings account somewhere else is nice but only for an emergency fund as chasing the latest 0.2% from some no-name bank isn't worth it. With the mySmartCash account, any ATM is your ATM as they reimburse you for all charges so not having a branch is no big deal.
miserly said: But what would be the disadvantage of putting all of my money at Fidelity (or any other financial institution)? 1. Limited physical branches 2. I still have to go to other institutions for mortgage, for example. FDIC Coverage limits?
As others pointed out, you would be missing out on higher APYs/better credit card Cash Back programs, etc but you might be saving on the headaches of dealing with many different accounts. As usual, there is not right answer, it is what you are looking for that matters.
I would not be able to convince my parents to keep all money with the same institution no matter how hard I tried. They lost a significant amount of money (not a fortune, but a few years worth of salary) when the Soviet Union collapsed and all accounts pretty much disappeared. Of course, banking system in USA != USSR (politics aside) but still, it is the experience they will never forget.
On the other hand, I could see myself consolidating my assets in a few accounts in the future, once the time I spent managing the dozens of checking/savings/cc accounts (thanks to fatwallet) will not be worth the hassle. So far, it has been, but I do not have anything against consolidating if you are willing to accept lower rates.
Message edited by: dimamo1983 on 2009-10-28 23:06:17 CDT
Dman081 said:On the other hand, SIS, simplifying your life allows for more time to see and consider the bigger picture.WTF does that mean? Give specifics, not cliches.
If you have no money, yeah it doesnt really matter if you use the local bank at 0.25% interest. If you have substantial deposits, choosing different products can mean thousands extra in your pocket each year.
Same with ccs...if you charge a little, it makes no sense wasting time figuring out which has the best rewards. If you charge a lot, card choice becomes much more important.
If using 3 banks and 2 different CCs are taking so much time and preventing you from considering the "bigger picture" you have issues.
Retirement: My company 401k - Fidelity My Roth IRA - Fidelity (going to make use of 2% card) Wife's Roth IRA - Vanguard (lower fees)
Liquid: Savings - Local rewards checking (4.01%) Checking - Local rewards checking (4.01% but has a lot of branches) 3 National Rewards Checking - rotate money around when needed Ally - used for Hub to move money around (fast and free ACH)
CC's (that I use): Forward (5% restaurant, Amazon) Citi AMEX (5% edp, 3% everything for 1 more year) Discover More (5% on rotating categories)
The only thing that is annoying to me is my reward checking accounts. But the work done is well worth the 2% more I get on my money. As SIS said, the more money you have the more it matters to manage it correctly.
SUCKISSTAPLES said:This whole "simplify my financial life" idea is BS/.\if you are at FWF you are here to get the best financial deals. The best deals are never all offeered at one place. Penfed comes close, but not even they are a good place to put all your eggs. Either learn to embrace a multibank approach, or get comfortable knowing you are losing money
while i agree to an extent, i find chasing another 1/2% on HYS not worth my while. my net worth doens't translate that 1/2% to very much over a year. which also addresses the FDIC limits issue. i won't run into that for some time. and i don't consider not squeezing every last penny "losing" money, just not making more. sure FWF and FWHD are fun hobbies, but they certainly are my raison d'etre.
miserly said:while i agree to an extent, i find chasing another 1/2% on HYS not worth my while. ... sure FWF and FWHD are fun hobbies, but they certainly are [not?] my raison d'etre.
That's fine, to each his own, but why then did you start this thread? The downside of consolidating is losing money/opportunities, but if that's not important to you, then why ask?
thats not the only downside...as others pointed out above, redundancy is crucial in case of fraud or any other problem at fidelity... And it may be too late at that point to open a new acct elsewhere (ie if you discover youve been reported to chex)
Also its very convenient to have a local bank sometimes, and may actually simplify things when you need quick cash or a cashiers check or document notarized etc
You're right, SIS, about redundancy and convenience. It's funny, I consider myself fairly 'consolidated' at Fidelity but only because it's my hub for a half dozen more accounts at different institutions, local and online.
"Consolidation" is easily accomplished with a single spreadsheet.
Message edited by: UncaMikey on 2009-10-29 12:51:41 CDT
I've found that the banks/institutions that offer the best deposit accounts rarely offer the best credit accounts. That's probably not a coincidence. Schwab might come close though. Penfed offers a great reward credit card, but their checking/savings accounts have higher fees/fewer perks like free ATM networks that other credit unions may have. I've found picking a leader in each category (investing, checking, online savings, credit card) works the best if you're into maximizing your deals.
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