So I'm seeing these offers from Brokerage houses offering great services on checking accounts (high APY, free checks, not ATM fees). The only thing is you have to link the checking account to a brokerage account. They say that you don't ever have to use the Brokerage account, but I am skeptical. Is there anything I should know or need to worry about if I were to open up this checking account along with the brokerage account (fees, complcations)? Or is this a pretty simple deal and I should stop worrying?

 

If you want something totaly free, get a WAMU account. www.wamu.com
Not sure where in NY you are but NYC does have branches.

 

Thanks, but you need over 10K in the account to waive the $20 monthly service fee, which would probably be more than the interest i would earn on the low APY I would get by keeping less than 10K in the account. I keep small amounts in checking.

 

I should add to this, brokerage houses offer high APY (4%) on all account balances

 

Then ING, or EmigrantDirect may be a way to go. Current yelid is around 4%.

 

The question is why? Why not a brokerage house?

 

I tend to want to keep my accounts for one type of activity.
checking=spending
brokerage=trading
savings=savings

Keeps my mind from worrying about stupid stuff, like what happens if my checking account gets a margin call.

 

That's kinda what i'm thinking too.

Apparently the accounts are totally seperate, but you have to open both accounts. It makes me wonder why. They would still be getting my money if i only opened a checking, so why the necessity of opening a brokerage account.

 

Why would you need a brokerage account? Do you trade stocks? Have any interest in them?

The reason why these places offer accounts is to get you to get into that business. This way you have an account linked to the brokerage account.
If you decided to trade they can take your $ out of the regular account to cover costs.

 

I already have a brokerage account at Wachovia that i use for trading. I don't need another one. The reason I don't open a checking account at Wachovia is because the money is run by a family member and I want some privacy with this account (personal spending).

So, no, I don't need a brokerage, but i have to open one to get the benefits of the checking account. i just don't want to get hit with any surprises by opening both these accounts and only using the checking account.

 

Then make sure you talk to someone live & ask. And get things in writing.

 

We have a small account at a local bank and everything else is done through AG Edwards. Paychecks get direct deposited there and we have two checking accounts; one main account, one for big items like property taxes, daycare, etc. Since we have investment accounts there, fees are minimal and it's extremely convenient. Full ATM access, etc. Only downside is I have to call to move money from one checking account to another (infrequent), but it's no big deal as I have one contact person at the branch and everything is always taken care of promptly.


Given the 4.5% and higher rates we're getting on the cash and the benefits of picking up the phone and having that money instantly being moved into stocks/funds/bonds, it has really worked well for us.

 

I'm by no means the expert, but it really just seems like a marketing ploy and a way for them to get their foot in the door with their brokerage platform. Should the need arise to trade securities, etc. they are places bets on the percentages that people will at least give them a try when that time comes since you're already set up.

 

Those are the thoughts i was having as well