We walked into our local credit union to close our accounts this weekend: a premium money market account yielding 1.85%, a savings account with $5 to keep the membership open and an increasingly isolated checking account both yielding 0.05%. Our last CD had matured the month prior. Mrs. Dress Pockets expressed some reservation in losing the free notary service and the tooth fairy would purchase a roll of $1 coins every 5 years. If we find ourselves increasingly in need of those services, perhaps we’ll open a few savings accounts for the kids. For now I’ll take one less monthly statement to download and three fewer accounts to sync with Empower Personal Dashboard.
From a high of 7 checking accounts, we are down to 3. One joint Schwab Bank investor checking account with free check printing and ATM fee reimbursements. Two individual Fidelity cash management accounts with free check printing and ATM fee reimbursements. We go to an ATM about once every two years, so the fee reimbursement is more of a moral victory.
Recently I changed the Fidelity cash management core positions from FDIC bank sweep yielding 2.35% to SPAXX yielding 4.39%. Prior to that I was manually purchasing SPRXX yielding 4.40% as deposits posted. Any Fidelity checks or ACH withdrawals automatically liquidate the money market position to cover.
The bulk of our medium to long term cash resides in Vanguard brokerage accounts in VMRXX (4.70%) and VMFXX (4.69%). There’s no check writing on these accounts so we would sell money market fund shares and transfer to Schwab in order to spend that money. I’ve looked into the new Vanguard Cash Plus accounts but with no checks and no ATM/debit card, Fidelity cash management wins.
I still spend way more time than I should looking into high yield savings accounts and what others use for cash management. Mrs. Dress Pockets mentioned an Apple Card paired with a Goldman Sachs savings account. The rate looks good (4.10%) but the fine print shows it’s difficult to transfer large sums of money out: “Transfers must be at least $1.00 and can be no more than $10,000. You may transfer no more than $20,000 per rolling 7-day period.” Not a big deal until you want to buy a car or put a down payment on a house. I haven’t encountered any 5 or 6 digit transfer limits with Schwab, Fidelity or Vanguard.
Note: The Federal Reserve lowered interest rates by 50 basis points in September and 25 basis points in November so all bank deposit and money market fund yields listed above will be trending lower.
