Bank With Your Broker
Finding a no-strings-attached free-checking account has gotten harder. That's because banks are looking for new sources of revenue to compensate for the loss of some fees banned by consumer-friendly legislation (see Free Checking Is Tougher to Find).
The December issue of Kiplinger's Personal Finance points out a way to avoid fees on your checking account: Bank with your broker. Here's the tip from that issue, which will hit newsstands November 9:
You could simplify your life by using your brokerage as your bank. Both Fidelity and Schwab offer FDIC-insured checking accounts with no monthly fees or minimum-balance requirements, and free bill-pay. You can transfer funds from your brokerage account to your checking account and have immediate access to the money.
Fidelity. You can have funds swept from your brokerage account in a mySmart Cash account, which currently earns 0.1%. Arrange for direct deposit, or deposit checks by mail or at Fidelity branches. You get free, unlimited check writing and free checks, plus free money transfers. Fidelity reimburses all ATM-withdrawal fees worldwide. You'll need $2,500 to open a Fidelity brokerage account.
Schwab. When you open a High Yield Bank Investor Checking account, which currently earns 0.25%, you automatically open a brokerage account at the same time, but you do not have to deposit funds or securities into it. You can arrange for direct deposit or mail your deposits (but you cannot make deposits at Schwab branches). You get free checks, unlimited check writing and free money transfers. Schwab reimburses all ATM fees worldwide.