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Checking Account Showdown: Fidelity vs Schwab

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Wallet with Debit Cards

Every financial institution today wants to be the center of your financial life. Banks like Chase and Wells Fargo are actively trying to promote their new investment account products alongside your bank accounts. When you looker deeper though, some of the best checking accounts available today are being offered by brokerage firms.

Charles Schwab’s High Yield Investor Checking and Fidelity’s Cash Management account are two great contenders with loads of perks to make your checking account with them as low-cost and rewarding as possible. We’ll go through all of the best parts of each checking account and pick the winner in this round of checking account showdown.

Schwab vs Fidelity Debit Card

A simple debit card can sometimes be the most frustrating part of any checking account. Still, both of these accounts attempt to take what would normally be a disadvantage for them (no bank branch locations) and turn it into a huge advantage for their account holders. Schwab and Fidelity both offer unlimited ATM withdrawal fee reimbursements to their customers. A massive perk that makes it easy to access your money from more places than ever without paying a dime.

There are some key differences between the two debit cards though. If you’re an international traveler the Schwab card is the better option as there are no foreign transaction fees when using the Schwab debit card. The Fidelity debit card on the other hand charges a 1% transaction fee on top of any fees to convert your cash into the local currency.

One small annoyance of the Schwab debit card is that the ATM fees are reimbursed at the end of the month rather than directly after the transaction. Also if you require the ability to take a lot of cash out each day you should note that the Charles Schwab debit card allows you to withdraw $1,000 a day while the Fidelity debit card only allows you to withdraw $500 per day.

With each card, you can expect some great standard features like contactless payments, the ability to lock/unlock your card through their mobile apps, automated fraud alerts, and digital cards. They also both offer warranty protection, though I would recommend using the American Express Platinum for this perk as it can add an extra year to your warranty rather than 90 days with these cards.

Both of these debit cards offer a way better experience than your standard debit card but overall in this category Schwab is the winner because of its no foreign transaction fee perk.

Interest Rates and FDIC Insurance

The average checking account in the US earns an abysmal 0.03% interest rate. The Schwab and Fidelity cash management accounts are on an entirely different level in comparison. With the Fidelity Cash Management account, you’ll receive a 0.69% interest rate on all of your deposits and up to $1.25 million of FDIC insurance. For the Schwab High Yield Investor Checking, you’ll receive a 0.15% interest rate and FDIC insurance up to the standard amount of $250,000.

The critical difference between the two accounts is that Schwab utilizes their bank while Fidelity uses 5 partner banks that allow them to quintuple the amount of FDIC insurance by sweeping your funds into each of the partner banks. This also helps them achieve a higher interest rate for your cash by having multiple banking partners compete to offer you (and Fidelity) the best rate for your cash.

With each account, you can also expect no minimum balance and no listed fees.

In this category, Fidelity is the clear winner because of the higher savings rate and much larger FDIC insurance amount.

Banking Features and Access (Including Zelle)

With so many neobanks launching online today you can sometimes see certain online banks just lacking basic features. Both come with standard features like mobile check deposit, direct deposit, and the ability to order checks. Schwab goes above and beyond to create a fuller banking experience by offering access to Zelle and wire transfers directly from the account. Sadly, you still can not use Zelle with your Fidelity Cash Management account.

Fidelity vs Schwab Mobile Apps

Fidelity vs Charles Schwab Mobile App Experience

While Zelle may be a dealbreaker for some people another important aspect of any online checking account is the app you’ll use to access your account. For a long time, Charles Schwab was the clear winner as Fidelity’s app felt old and clunky to use. Recently though, Fidelity came out with a major update to their app that made it easier to navigate with a modern design and features like the ability to track your spending across multiple accounts, even ones outside of Fidelity.

In this category, we’re essentially a tie. While Fidelity doesn’t have access to Zelle, in today's market a better mobile app makes all the difference.

Who is the Winner?

To be perfectly honest when I came to write this article I assumed that Charles Schwab had the upper hand here and many times I had thought about moving my checking account over to them because I’m already a TD Ameritrade user. After digging through all the information the clear winner here is Fidelity because of their high-interest rate, great mobile app experience, and good enough debit card. In the areas where Fidelity doesn’t excel such as foreign transaction fees, you can make up for it by utilizing credit cards with no foreign transaction fees such as the Chase Sapphire Preferred, and earn points along the way.