Sunday, May 3, 2009

Interested in interest? Schwab pays 100x what Chase does...

Like your bank?

We didn't, so we changed, and while it's rare that we'll endorse a product, when doing so gives us a chance to sh-tcan someone else's idiocy, we'll gladly do so.

Our JPMorgan Chase savings statement arrived today. It carried this footnote: "You earned a higher interest rate on your Chase Money Market Savings account during this statement period because you had a qualifying Chase Better Banking Checking Account."

We chuckled when we noted that the "higher" interest rate was...wait for it...two basis points. For those of you unfamiliar with a basis point, it's one percent of one percent. Chase is borrowing our money at two hundredths of a percent.

It's so little that Chase trying to sell this to us as a benefit would be perfectly laughable ... if it weren't so insulting. Who's their marketing head? How stupid do they think we all are?

We're close enough to the financial markets to know that money market rates are in the tank, and we won't bother you with the monetary policy shifts that have led to this.

We will, though, note two things. First, that we took most of our business away from Chase recently. While we're no Bill Gates, it was enough that we'd think they'd notice, and nobody in the bank so much as called, emailed or sent a smoke signal to ask if there was a problem.

There was a problem, and it's this. Schwab's bank pays exactly one hundred times what Chase does in interest on both its checking and savings accounts.

Yep. You read right. On checking, Chase pays 0.01%, Schwab pays 1.00%. On savings, Chase pays 0.02%, Schwab pays 2.00%.

Schwab's banking products still have a few bugs in them. You can't transfer funds online. You have to have two debit cards. But for 100x more interest -- especially during spare economic times -- we'll suffer a little.

Oh yeah, Schwab's client service people are based in the US, speak good English, are courteous and professional...and Schwab reimburses all ATM fees.

Got your interest now?

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