It has become common for brokerages to offer free checking accounts. These provide another option for those who want to leave their megabank. Last year the brokerage firm Scottrade launched Scottrade Bank to offer deposit accounts to it brokerage customers. According to last year's press release the bank was rolled out to only certain parts of the nation. I just confirmed that customers in any state can now open accounts. The bank offers checking and savings accounts, and CDs. However, the checking account will probably be the only account that's appealing to most people since the interest rates are so low. The interest rates are only listed for customers when they're logged in. The customer service representative (CSR) provided me the rates of the savings account. Since they're so low, I'll only provide the high-tier rate: 0.13% for balances from $100K up to $250K (as of 4/11/2012).
If you have a Scottrade brokerage account, Scottrade Bank and its free checking account may allow you to dump your local bank. The only reason that you may still need a local brick-and-mortar bank is for cash deposits. Below are some of the important features of Scottrade Bank's checking account:
- No monthly service fees
- Free ACH funds transfers
- Free online bill pay
- Free checks and ATM/debit card
- ATM fee reimbursement program
- FDIC insurance
The ATM fee reimbursement program provides unlimited ATM fee refunds for cash withdrawals. There are no refunds for currency exchange fees.
Before you can open a Scottrade Bank account, you must first have a Scottrade brokerage account. The brokerage account requires an initial deposit of just $500 for all of our brokerage account types, but they do not require you to maintain a minimum balance.
New account bonuses are common at brokerages. Currently, there isn't anything that great at Scottrade. One minor bonus is a ReferALL promotion. If you are referred by a friend or relative to Scottrade, you will both receive three free online trades. These free trades are good for up to six months. They are also currently offering a promotion to reimburse the transfer-out fees charged by other brokerages when you transfer to Scottrade. They will reimburse transfer-out fees up to $100 for transfers of $10,000 or greater.
Scottrade Bank is a sizeable bank with over $12 billion in deposits. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) based on December 2011 data. Please refer to our financial overview of Scottrade Bank for more details. The bank has been a FDIC member since 2008 (FDIC Certificate # 58656).
How Does The Checking Account Compare
Other popular brokerages that offer free checking accounts include TD Ameritrade (Online Cash Services), Fidelity (Fidelity Cash Management) and Charles Schwab (Schwab Bank High Yield Investor Checking). All of these offer FDIC-insured accounts, no monthly fees, free checks and ATM fee reimbursements. Your decision about which one to choose will probably be based on the brokerage features rather than the checking features.