Dropping local brick/mortar bank? Ally versus Fido banking?

[dgva]

We have historically done our personal day to day finances with two joint checking accounts at a local brick and mortar bank with each spouse as primary on one account.  Our "local bank" 6 months ago underwent M & A, but our branch was not carried into the new ownership.  This leaves us with a 2 hr drive round trip to our closest branch.  We could look into moving to another brick and mortar bank, but it seems to be increasingly irrelevant.   We have done fine during the pandemic without making a trip to a bank.

We have also had both an Ally savings account and a single joint checking acocunt that we used to run funds while building our "forever" home,keeping the $ separate from our day to day checking acocunts.  Just made it easy to keep the $ straight.  We have been impressed with Ally service; their interest rates tend to be at the top of the marketplace.

We are thinking of just adding another checking account to Ally and forgetting about local banking.  We don't use ATM's much and the number of fee waived would likely be fine.  We also have retirment acocunts at TIAA; they have recently offered banking but IMO, TIAA CREF is relatively poor at service.  We also have FIDO and Vanguard accounts.

I'm not seeing any downshide to dropping brick and mortar bank, but maybe we are missing something?  Any thoughts re Ally versus FIDO for checking/savings?  We have limited FIDO experience having just moved funds from TSP to FIDO when spouse retired.
    

[yogibearbull]

Fido, Vanguard, etc don't have true banking services. Sure, they provide bill pay, ACH links to banks, credit/debt cards, etc.

On the other hand, Schwab, TIAA, etc do have genuine banking subsidiaries.

There are also many online banks - Marcus, Ally, Capital One, etc. You can link these to your regular checking accounts for electronic transfers.   

money.usnews.com/banking/online-banks

www.bankrate.com/banking/best-online-banks/

[javajoe]

This may be irrelevant to you, but one thing we ran into just recently is that not all "online only" banks allow POD designations. We have a large sum in aggregate with Cap One 360 online (formerly ING Direct) which has been been a great overall experience (fast and clean website, simple app with easy transfers and reporting etc), but they do not allow you to do a POD designation for estate planning. You have to actually re-title the accounts in the name of your trust which is kind of a hassle if you ever want to change. -JavaJoe

[yogibearbull]

javajoe , good point about details. I also have Capital One 360/online account. It links only to banks and credit unions, but not to brokerages. Linking trusts weren't allowed initially but was allowed later. So, one has to investigate online banking options to suit own needs.

[dgva]

Mar 2, 2021 23:45:37 GMT javajoe said:

This may be irrelevant to you, but one thing we ran into just recently is that not all "online only" banks allow POD designations. We have a large sum in aggregate with Cap One 360 online (formerly ING Direct) which has been been a great overall experience (fast and clean website, simple app with easy transfers and reporting etc), but they do not allow you to do a POD designation for estate planning. You have to actually re-title the accounts in the name of your trust which is kind of a hassle if you ever want to change. -JavaJoe

Thanks, Javajoe.  Agree that POD is an important option.

I just looked and Ally does allow both POD and beneficiary designations for each account.  

[dgva]

Mar 2, 2021 23:37:08 GMT yogibearbull said:

Fido, Vanguard, etc don't have true banking services. Sure, they provide bill pay, ACH links to banks, credit/debt cards, etc.

On the other hand, Schwab, TIAA, etc do have genuine banking subsidiaries.

There are also many online banks - Marcus, Ally, Capital One, etc. You can link these to your regular checking accounts for electronic transfers.   

money.usnews.com/banking/online-banks

www.bankrate.com/banking/best-online-banks/

Thanks, YBB.  From what I read, FIDO links to several banks, rather than having their own.   They claim it is a big advantage, but I don't see a big advantage.

Because we already have links between two existing Ally accounts and V and FIDO, adding a third Ally account would be easy and would not need to be linked as transfers within Ally are instantaneous.    

Our recent experience with setting up withdrawal paperwork at TIAA has turned us off from considering using them for our bank.  Adding money to TIAA was easy when we recently considered transferring more to them; they were eager to help and assigned us a single person.  However, dealing with withdrawals was time consuming with many errors in information, including wrong forms sent to us.  We were given incorrect info on multiple phone calls, in emails and in form letters sent that were irrelevant and wrong for the paperwork we were processing.  

[yogibearbull]

I think you have found the answer for your needs - more Ally!

Fido's program of linking to many banks is for overnight sweeps of large amounts of brokerage cash held. That is a valid but different purpose than regular banking.

Access to some physical banking services is also important if you ever need stuff like bank safe deposit boxes, bank verification of signatures or Medallion Signature Guarantee, and may be some free coffee. Notary isn't enough for some things.

[anitya]

Mar 2, 2021 23:56:13 GMT yogibearbull said:

javajoe , good point about details. I also have Capital One 360/online account. It links only to banks and credit unions, but not to brokerages. Linking trusts weren't allowed initially but was allowed later. So, one has to investigate online banking options to suit own needs.

Yogi,

My 360 online account is linked to all my brokerages in that the brokerages can pull from or push money to 360.  Is not that the same between brokerages and any other bank?  I think money can not be pushed from a regular bank to 360 online account which may be true for all online only bank accounts like GS/Marcus.  

May be there is a nuance about 360 you are trying to convey I am not connecting.

A

[Deleted]

I have switched from WellsFargo to Fidelity Banking checking account. For my checking account Fidelity uses UMB bank. I have not had any issues so far. It has been smooth. I do have brick and mortar account for just in case but I only needed it once for banker's check.

[yogibearbull]

Mar 3, 2021 3:32:13 GMT anitya said:

Mar 2, 2021 23:56:13 GMT yogibearbull said:

javajoe , good point about details. I also have Capital One 360/online account. It links only to banks and credit unions, but not to brokerages. Linking trusts weren't allowed initially but was allowed later. So, one has to investigate online banking options to suit own needs.

Yogi,

My 360 online account is linked to all my brokerages in that the brokerages can pull from or push money to 360.  Is not that the same between brokerages and any other bank?  I think money can not be pushed from a regular bank to 360 online account which may be true for all online only bank accounts like GS/Marcus.  

May be there is a nuance about 360 you are trying to convey I am not connecting.

A

I initiated linking from Capital One and only options I got were to enter routing numbers for bank or credit union and that a total of 3 such accounts could be connected. I did this a while ago, so I don't know if limitations have changed.

It seems you initiated linking from brokerage(s) and I have done that for some other bank accounts but not for Capital One. 

It seems that linking process is asymmetric. There was one case where a bank won't connect to brokerage but the reverse was possible.

[dgva]

Thanks for the discussion. The other wrinkle that I was wondering about was how long it takes transfers to be credited. For example, TIAA withdrawal was posted at TIAA on March 1 and is just today (March 3) showing as an electronic transfer into Ally. Is that the typical speed/reasonable of interbank transfers? Or do some banks credit faster? I know it goes through a clearinghouse process that differs from a wire transfer, and I seem to remember something about a 3 day rule to prevent fraud?

Our brick and mortar bank was very slow on push/pull of cash to/from other institutions. Paying credit card bill always took longer if initiated at the bank rather than initiating at the CC company.

So far, I have not heard a case for maintaining a brick and mortar local account, which was our original decision point.

[yogibearbull]

2-3 days is typical for ACH transfers. These are done in batches several times during the day. Although actually done the same day or the next day, extra 1-2 days are provided for institutional error reports.

US is lagging in money transfers. Real-time money transfers are possible in India and many other countries. Hopefully, the US catches up soon. While fraud and money laundering concerns are valid, batch processing with 1-2 day delays is not the only solution.

[javajoe]

To answer your original question, I think 90% of brick and mortar will be obsolete in 10-12 years. I personally went 9 years without setting foot in one and my 11 year old has 5 different financial accounts (checking, two savings, 1 Roth, 1 Square + plus her Etsy store) and has never written a physical check (she doesn't even have them) and only physically been in a branch once to open an account.

Fintech, frictionless commerce, and electronic document signing are all way past the adoption curve, real estate is expensive, and W2 fully loaded labor costs are rising too rapidly not to move everything online.

[nromsted]

IMO, a 2 hour round trip would be too far for a "local" brick and mortar branch. I do like having a local branch, even though I have been doing more business on-line.

Services I expect from my local branch that are difficult to provide remotely:
- Safe deposit box
- Notary and signature guarantee services
- Wire transfers
- Clearing up issues, so I don't have to spend hours on the phone with customer service
- Cash withdrawals (for more than an ATM could provide)

[Chahta]

I have had only a Scwab banking for 6 years. No problems at all. Have not walked into a real bank building for years. Cash is the only weak link for deposits. I have a floor safe to hold some cash. Who needs them.

[dgva]

Mar 4, 2021 15:12:22 GMT nromsted said:

IMO, a 2 hour round trip would be too far for a "local" brick and mortar branch. I do like having a local branch, even though I have been doing more business on-line.

Services I expect from my local branch that are difficult to provide remotely:
- Safe deposit box
- Notary and signature guarantee services
- Wire transfers
- Clearing up issues, so I don't have to spend hours on the phone with customer service
- Cash withdrawals (for more than an ATM could provide)

Promsted, you raise very good points.  Because our bank closed/sold off branches, if we want local, we have to close those accounts and move them closer to us, but it will still be a 30 min drive to a bank. 

For notary, we have several more local options, including a UPS store.  Cost is $5 per stamp, but we do it so infrequently, that is not a big deal. 

Ally will do wire transfers based on online requests and $20 charge is same as our brick and mortar charged us.  

I dont see a solution to the safety deposit box.  We have historically kept one for important papers, but did not visit it often.  Any more creative ideas on this one, anyone?

For cash withdrawals, we did do a few very large ones while building the house, but otherwise, have not done that in the past.  The limit on our two checking accounts would be 1K each.  If we needed more than that, I am guessing one can wire money to oneself perhaps even if not a bank customer?  We had one experience in a very remote area (Indian reservation) making a large credit card cash advance at a bank that was not ours.  It worked OK and we just paid it off immediately after returning to an internet accessible place.  That was over 20 years ago though, so things likely different now.

The other item I just thought of is access to currency exchange when travelling overseas.  In past, we were living in urban centers and even then had to make a trip "downtown" to get any foreign currency other than Euros.  We are doing less (actually none at the moment) international travel.   It does seem that having foreign currency is less of an issue as most of our spending is done with plastic.  But  it is still can be better to have at least some spending cash before arriving into foreign countries IMO.  I know you can usually exchange at international airports, although access to smaller bills is less and you pay more for the exchange.  Probably not a deal breaker worth having a local branch.

We haven't really had an issues to clear up, but as we get older that might change too.  So, it is worth consideration.

Good thoughts.  Thanks very much.




  

[dgva]

Mar 4, 2021 15:20:31 GMT Chahta said:

I have had only a Scwab banking for 6 years. No problems at all. Have not walked into a real bank building for years. Cash is the only weak link for deposits. I have a floor safe to hold some cash. Who needs them.

Chahta,  Thanks for your comment.  The floor safe could be at least a partial solution to the safety deposit box issue in terms of fire protection for documents, as well as to hold a cash stash. 

When my parents were aging and dealing with dementia, the children found having a joint safety deposit box very useful for the important papers, because we all lived in different cities around the US and never knew who might need to access them or when.  It was particularly true after assisted/memory care became reality.  Hopefully, we are quite a few years still from similar challenge ourselves.  With digitalizing documents becoming more acceptable, the need for original paperwork may be moot in the future.

[FD1000]

I still like to have a local bank but if I had to close I would open a credit union local account which has much better fees + safe deposit box(which I never used) + notary (which I haven't used for years).

I already have Fidelity and Schwab accounts, but 95% of our money is in Schwab because it's better for me (I don't want to post a long narrative why). Schwab has a true bank and it has world ATM with free fees (Fidelity has a fee on abroad ATM) to all/most ATM from other institutions.  I have used Schwab wires too and all were free.

[steadyeddy]

I use Bank Of America as the brick-and-mortar bank (have investments in Merrill to get credit card rewards) mainly as convenience. Large sums are with Ally. Easy to do business with.

[Capital]

For some years I have used Fidelity for most of my investment/banking needs, including virtually all my bill pay. I have used a local "Regional" bank for almost 30 years. They provide my lending needs via a home equity line. I manage my debt payments using my local bank accounts. My children also have checking and savings accounts I can monitor at our local bank. At Fidelity my spouse and I each have separate Rollover IRAs, Roth IRAs and HSAs. Jointly we have Brokerage and Cash Management accounts. The Cash Management Account is our Fidelity checkbook. We both have 401Ks, mine at Fidelity and hers at Empower. Since I can do in service withdrawals I annually sweep most of my 401K to my Rollover IRA with a phone call to Fidelity. I am not at all satisfied with Empower and will be glad to have those funds transferred to Fidelity when possible. In addition I have both UTMA accounts and Roth IRAs for my children at Fidelity where I can manage these funds for them.

[bb2]

Schwab.  No business. No loans.  Simple life.

[hondo]

Have you considered looking for a local credit union bank in your area for your personal day to day checking needs?

[Deleted]

I am using Fidelity as my primary checking account for couple of years now. Fidelity uses UMB Bank behind the scenes for my account. No issues so far.

[roi2020]

I have a taxable Fidelity account but don't use any of their banking services except for the Fidelity Rewards Visa.

I've been with Ally for several years now and have no complaints.
Their Online Savings account has been my primary account although I also purchased some short-term CDs a few years ago.
I have not taken advantage of any other Ally products/services.

A local credit union is used for paycheck direct-deposit, bill pay, and checkwriting (rarely do nowadays).
The ability to interact with someone in person to resolve any issues is appealing to me.