I never thought I'd see the day that Charles Schwab featured a checking account on its homepage (see note 1). Even Schwab, that built its business catering to do-it-yourself individual investors, wants a piece of those cash balances sitting in non-interest checking or low-rate checking/savings accounts.
With many major banks still paying next to nothing on deposits (as low as 0.10% annually on savings, see note 2), direct banks and other non-traditional outlets are still looking to grab deposit share even though most have dropped their promotional rates below the magic 5% mark (previous coverage here).
Schwab.com homepage (18 Oct. 2007, 11 a.m. Pacific)
Schwab login page (18 Oct. 2007, 11 a.m. Pacific)
1. The bank promotion is on Schwab's main site, NOT a special landing page or Schwab Bank page.
2. Memo to US Bank: Don't you think it's time to raise your savings account rates? I have my checking account at US Bank and was thinking of parking some cash for a few weeks in an interest-bearing account. But I was shocked when I looked at the rates. There is nothing I could apply for online that would pay more than 0.40% and most paid just 0.10% (see inset).
That's no typo; one-tenth of one percent on savings accounts across all balance levels. That's less than a $1 per month on a $10,000 balance! Pre-tax.
There's only one deposit account that cracks the 1% mark, Maximum Money Market, which pays 2% to 2.5% for balances greater than $10,000. But you can't even apply for that one online, you have to visit a branch.
I don't care how much you make on the so-called lazy money, a rate page that looks like US Bank's (see screenshot above) is a marketing and PR disaster.