FiLife

Ok, for those of you tuning in to the middle of our programming, here’s the briefest of recaps:

• I bank at Citibank
• Like most of you that use the bank on the corner, I get hit with all sorts of fees.
• I hate Citibank.
• I want a checking account that reimburses me for all ATM fees, has no fees or minimums of its own, has a good online setup and pays me a stupid amount of interest for storing my money there.
• Until recently, I thought that none of this was possible.
• I was wrong.
• Turns out most, if not all, of the best banking deals can be found at online banks.
• After some initial research, I thought that Charles Schwab had the best deal going.

So that should bring us up to speed. Since my last post, I’ve had a course correction. I was all set to sign up with Charles Schwab (had the application filled out and everything), but then a little birdy whispered “Fidelity” in my ear, so I went to check out what that mutual-fund and brokerage company was offering.

Turns out they were offering almost the exact same thing. Except the interest rate on their checking account was 3.5%. Schwab’s is 4%. Game over, you would think.

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For years, my cash reserves sat in the Vanguard Prime Money Market Fund, a venerable go-to fund, consistently offering top returns with minimal fees. I always thought that nothing could beat it. Then I moved to New York, a high-tax state, and got married. Now, as my wife and I are reevaluating our finances after the birth of our daughter, we realize we can do better. In certain money-market accounts, we actually make more by earning less. How?

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