A couple of months ago, I wrote about my desire to simplify my finances and make our lives a little easier. Method #1 was to consolidate the number of banks had accounts with and just make our banking situation easier. Despite the fact I wrote about this back in April, I saw my upcoming wedding as the golden opportunity to hit the reset button and start over in terms of banking when we would eventually consolidate our finances. Before the weeding, we banked at four branches. We made our decision and after we were married and reduced that number to one. What’s even crazier is that we dropped the idea of using a local bank with “roots,” or branches, in our community. I’ll let you in our decision to ditch a bank with a physical branch all together and take the first step towards simplifying our finances!
Out of the four places we banked at, we only had one in common…Capital One. Two of the banks were our personal checking accounts that we have had for as long as we could remember, one of the accounts was a joint account we opened for wedding expenses, and then there was Capital One. Honestly, I didn’t even know Capital One had an online bank until Lanny introduced me to their high yielding savings account over three years ago. The high interest rate was a great place to park our excess capital and try to earn something versus meager savings rate offered by the local branch. Thanks for the tip-off Lanny! Due to the high interest rates, it was determined that we were definitely not ditching the online bank.
Before I go any further, I felt that I should make one thing clear…this is not a sponsored post for Capital One. I just wanted to make that clear so you aren’t thinking that while you are reading the rest of the article. I’m simply sharing my experience/research with you all. However, if you are interested in checking it out, I included a referral link here! Okay, so now, back to the article.
Our initial plan have one banking account with Capital One and one account at a bank with local branches. Unfortunately our website’s favorite community bank that we keep scooping up shares of, Citizens and Northern, does not bank in our neighborhood. That would have been a game changer. Anyway, back to business. The thought was to continue to have the Capital One account to take advantage of the high savings rate and to have one bank nearby to assist in the day-to-day operations of our life. You know, things like depositing a check at a branch, withdrawing funds from the ATM, and having a place we could go to if needed. So which of the three would we pick? We combed through all of our options and determined we were going to opt for the one with the lowest fees and largest benefits.
Honestly, after our first review, we weren’t liking what we were seeing. Each of the banks had their pros or cons that resulted in additional banking fees being charged for one thing or another. One bank had ATM withdrawal fees that would never be waived, the other had a ridiculous high average balance that was required to waive checking/savings account fees, and one place had nothing going for it and even charged you for each checkbook (It was easy to figure out that we were ditching that one haha). We made our choice and were ready to pick the one with the no fee checking account with ATM fees for withdrawals at non-bank branches. That’s a fee we could control. But honestly, we weren’t exactly thrilled with out selection.
Then one day, literally one day before we were ready to visit the branch and set up our new banking relationship, we had a thought while sipping on a nice cup of Starbucks coffee brewed at home. Why not just bank entirely with Capital One? They have no fee checking and savings accounts (with that higher interest rate) and link very well to our Sharebuilder/Capital One Banking accounts. There was the one hurdle/roadblock that we had to get over first… the fact that Capital One does not have any physical branches in Ohio and we would have to do everything electronically. Could we convince ourselves to ditch conventional banking in favor of this laptop/app driven bank? We debated our fears/worries of this approach and here were our arguments. For this, we spent a lot of time on Capital One’s website and began investigating.
Concern #1 – Depositing Checks. As it turns out, using Capital One’s mobile deposit feature, we could up to $5,000 worth of checks during any business day via mobile deposit. If not, you could always mail the check in as a tribute to the old ways of doing things. We asked ourselves when was the last time we ever deposited more than $5,000 of checks in one day. The answer was never. No longer a concern.
Concern # 2 – Access to Cash. We were training our whole lives that you had to withdraw cash from your specific banks ATMs to avoid paying a fee. You could get the cash from anywhere, but you were going to pay. We definitely didn’t want to bank with Capital One if we were going to be charged ATM fees every time we wanted to withdraw cash from our bank account. Upon review of the website, we actually learned that Capital One has a network of over 40,000+ fee free ATMs throughout the country. The website/app has a really easy ATM locator function that shows you ATMs that allow you to withdraw cash fee-free. In fact, there were about 5 ATMs that were within a mile to our house. Blew our mind! Well you get it, it clearly was no longer a concern.
After that, something funny happened. There were no more concerns about using Capital One as our only bank. Honestly, it is easier to deposit and withdraw your cash than traditional banks. The more we thought about it, the more we liked the idea of only having one bank to deal with and worry about on a day-to-day basis. Our finances would be under one umbrella and we would only have to remember one log in. Refreshing and liberating if you ask me. Just like that, we made our decision to ditch all the banks in the area and begin the long, annoying process of switching banks. Hopefully, our experiment of banking at a place without a physical branch in the area pays. If it doesn’t, no problem. There are plenty of banks in the sea and lots of sign-up bonuses for us to exploit!
Have any of you ditched your local bank and used Capital One or a bank like Capital One? Do you have one or multiple banks? Any advice for us as we continue to evolve our banking practices? What are your thoughts on our decision?
-Bert
I have been looking into Capital One recently due to their high yield and investing program. If I were to bank with them it would allow my capital to easily flow between bank account and investing account which I like. I never knew they had that many ATMs which was a big concern about moving to them.
I currently only have one bank with Wells Fargo. I am pretty sure I have not received more than a penny from them in terms of interest so this switch may be coming soon!
PS. We need to talk a bit about public account I would love to know your experience and where it took you!
Stefan,
The ATM discovery was a big breakthrough for me and was probably the thing that tipped the scale. The fact that your capital is easier o access because of the large ATM network versus brick and mortar banks blew my mind. Plus, since you don’t have it and I do, I can tell you that the link between checking and investing accounts is very convenient! Especially when you have to make a quick decision on an investment.
Feel free to email us whenever you would like to talk about public account! We would be happy to talk about it.
Bert
I have three. A local community bank with no fees as a shareholder, Schwab which credits (and makes available) funds/checks in minutes, and Wells Fargo which provides no fee accounts to mortgage holders. Even no fees on (and immediate receipt of) Euros last week.
Sounds like that set up is working great for you. Love the no fees concept. It is pretty cool that the community bank ties their fee structure to ownership. I don’t think I have heard of that here, but it is a cool incentive they can provide to combat the larger banks.
Bert
I have two checking accounts. The first one I opened with US Bank since they had a nearby branch that I could walk into and deposit checks. The one I use the most is the high-yield investor checking with Schwab. It isn’t so high-yield now but is otherwise great. Reimbursements of any ATM fees and no foreign transaction fees. I do all my investing through Schwab as well so the consolidation is nice.
I had a coin operated washer and dryer in my apartment a couple years back and I still really only use the US Bank account for getting rolls of quarters or depositing change.
I used to need US Bank to deposit checks (which I would then ACH transfer to Schwab). Since Schwab has mobile deposits now ($10,000 daily limit which can temporarily be raised to $25,000), I also no longer need a branch location for that reason.
Consolidating your accounts with Capital One sounds like it will work well for you too!
Scott
Scott,
I think having a set up with Capital One similar to yours with Schwab will be nice. Even though the rate isn’t as high, it isn’t like the savings account rates offered by any other bank is blowing the competition out of the water.
Is everything consolidated now for that reason? Or are you still hanging onto US Bank? It sounds like Schwab is another great non-branch option for those looking to ditch the physical banking tradition!
Bert
I still have that US Bank account but only keep the minimum ($5) to keep it open. I guess I still have it in case I ever need any change or want to deposit collected change. I also use it to receive any cash back rewards from my US Bank Cash+ card. Once I verify the funds are available I immediately initiate an ACH transfer to Schwab.
I haven’t stopped in a US Bank branch for about 4 years, though.
Scott
I have two of the online banks and one brick-and-mortar bank 🙂 I know it does not meet your simplification goal, but my rationale is this.
+ Each bank is a risk domain for me. Even though each bank is FDIC protected, if it goes under, it takes a while to get the money out of the bank.
+ And the online rates vary…for example, capitalone360 has 0.75% and ally bank has 0.99% interest.
+ I like the brick-and-mortar bank for services like nationwide atms, free demand drafts, instant access to cash…especially beyond the ATM limit, and we get a free bank locker (tiny one) to keep some important docs, cheque writing…
Been happy with this tradeoff for the past 2-3 years…hope this helps in some way. And thanks for the tip about capitalone atm locations…will check it out.
The beauty is that we all find out what works best for us. Simplification is what I want, but it definitely won’t work for everyone. If you want the higher interest rate without losing the security of the FDIC insurance, then go out and grab that higher interest rate! Plus, it sounds like the brick and mortar bank that you found offers up some pretty nice services. The free bank locker is definitely something an online bank cannot provide you. And to your point about the FDIC limits, it is true that the FDIC would take a while to pay out in a hypothetical payout. However (and this is despite what happened during the financial crisis), I don’t foresee a situation where keeping the cash under the FDIC limit at one bank would cause your cash to remain stuck at a bank for a while. You have to dig through their 10-Ks, Call Reports, etc., but there is enough information available that would alert you if the bank started to show signs of trouble that would provide you with enough time to liquidate if needed. But, again, if you want to spread out the cash and don’t mind having the extra accounts, then who cares haha
Bert
Checks? Really? When is banking in the US going to catch up with the rest of the world 😉 We have been doing electronic banking (direct deposits, payments, etc.) for the last 15 years without using checks at all (never even used one until we ended up in Canada, and even there we only had a handful in about 6 years).
Good luck with the switch. Hope they move forward and ultimately allow everything to be electronically performed.
Hahahaa oh yeah, plenty of people love writing checks still…especially the older generation. Me personally, I love the features that online banking provides you with electronic transfers and payments. Glad to see that ditching the paper checks has not brought your economy to a screeching halt haha
Bert
I have had a Huntington Checking and Savings account since college and its been earning next too nothing interest wise (.01%). However its easy enough to avoid fees as long as use their ATMS only which are spead all over Ohio. In 2014 I opened my IRA with Schwab, later that year I wanted a taxable brokerage account to start boosting the investments.
That new brokerage account came with a free checking account that earned .1% interest but I think its dropped down to .02%. The really cool thing though is that the checking account has a reimbursement of all ATM fees at the end of the month, Casino $5.99 fee at their weird ATMs not a problem as its all reimbursed. Heck I knew it said they even offered competitive exchange rates out of the country. Well last month I went to the Dominican Republic and had two separate withdrawals of about $60 each, it compared much better to the going rates at the airport and the hotel desk based on the defacto rates of about 45:1. To my amazement I was reimbursed almost $20 in ATM fees at the end of the month in addition to the great exchange rate, I thought it was a fluke.
Lastly to get my Savings really going when they aren’t being sent to my brokerage accounts I opened up an Ally savings account at the beginning of this year which earns a flat 1%. Its better than investing in VISA at a dividend yield of .7% when looking at just the cash flow.
P.S.
Awesome job by LeBron and the rest of the Cavs!
First and foremost. Amazing job by LeBron and the team to bring that one home. That game was a nail biter and it wasn’t decided until the very end. That block that LeBron had on Iguadola took the wind out of their sails and allowed the Cavs to finish them off if you ask me.
Huntington is very convenient and it is one of the banks that I have an account with now. Their no-fee checking account is pretty nice! A few other people who have commented on their article about Schwab’s checking account and it looks like I shuld have reviewed them before I sold my soul to Capital One. That ATM re-imbursement is HUGE, especially considering some of the high fee ATMs you mentioned in your response. How the heck do they offer a more competitive rate for currency? Now that is cool to me. I wonder if Capital One offers a service like that as well…hmmm.
Thanks for the comment and stopping by.
Bert
Hi Bert,
Looks like a good move to me. I use Ally Bank mostly so I don’t think you’ll have any issues with using only Capital One. The other nice feature they both have is bill payment which is convenient for sending checks (for free) when I can’t pay by credit card.
I do still have my brick and mortar account at Chase; I didn’t want to close it because of my credit score (it’s my oldest account) and it’s really just a pass-through account for my salary. I own shares in JPM too. Lastly I have a Schwab checking account (same as Tay’s comment above) because they reimburse all ATM fees worldwide – I just use that account for cash withdrawals. I like using the Schwab card at Chase ATM’s even though I have a Chase ATM card – I get a refund and Chase gets a little income from Schwab 😉
Best wishes,
-DL
Thanks DL! I love the bill payment feature. It takes away 99% of the hassle of writing a check (if there is such a thing. Plus, who really wants to write stuff out on paper anyway besides for my wife). That Schwab feature is clutch. If you travel and find yourself outside of the country, getting re-imbursed ATM fees would be amazing. It is also a cool way to differentiate yourself from the other online banks. I did some research on the credit score impact for closing my oldest account, but in the end, I didn’t see anything that was too damning. I have a CC with my oldest bank and I’m not closing that one. Instead, I’m just going to cut the card and maintain a zero balance.
Glad to see you have found a system that works out well for you! Some great ideas ifthe one bank idea isn’t as successful as I hope and I begin reviewing other offers.
Bert
Hey Bert,
Funny thing is I am also consolidating my accounts to one bank. Unfortunately I am departing from CapitalOne/Sharebuilder. I will have a post up soon to go into the details and my reasoning.
Cheers,
Dividend Family Guy
Dividend Family Guy,
What the heck???? Kidding, kidding. I am excited to see/read your post and see what changes you decided to make and why. I’ll battle my pros against your cons and see who wins haha
Bert
Bert,
Capital One is my bank. My wife and I use their 360 version, which I am sure you’re familiar with; its great good interest and puts everything under one roof. I had Wells Fargo before and she had BB&T. Now all we have is Cap One, with 2 small savings accounts at local credit unions => the most emergency of emergency funds…
Good choice to go with them.
– Gremlin
I’ve been using CapitalOne360 since it was ING. I appreciate it a ton. Simple, free and the best apr for small account holders like myself.
I use CapitalOne360 for my high yield savings but still use a local bank for my checking. I have been debating switching though because the onlineand mobile options are lacking, which is unacceptable in 2016.
Do you receive much cash? How does the cash deposit process work for an online account?