[quote=flu]I have a question for folks that use Schwab with as both a brokerage account and bank account….
Did you create a separate bank account from your brokerage/trading account, or did you just have one account that has both?
While I like the simplicity of just one account, I’m thinking of getting a standalone checking account with ATM with a very low cash balance…simply because if I lose my ATM card or it gets hacked, some perb doesn’t end up draining my assets in my brokerage…
Simultaneously, I’m thinking of disabling checkwriting/atm/and money tranfers from by brokerage too…Thoughts, or am I just being paranoid here?[/quote]
They are separate but linked… Technically schwab brokerage and schwab bank are separate institutions, regulated under different rules. The bank is fdic insured, the brokerage has SIPC. But it is totally seamless – one website – you can log in and get to everything (I have 2 IRA accounts, 1 post-tax brokerage account, 1 bank account – I can look at all from the same logon.)
Also Schwab’s SIPC is a bit different than many other brokerages… Most of the other big brokerages pool the risk together, and self insure as a pool. Schwab didn’t like that – and purchases SIPC insurance through traditional insurance (Lloyds of London). This made a difference to me because I was looking at it at the time Bear and Lehman were imploding. If all the brokerages collapsed simultaneously SIPC might not cover the holdings if it’s all pooled. (SIPC is mandated by the gov, but not backed by the gov the way FDIC is.)
