One of the nice things about being an adult in the adult world is that we all get to make our own choices. We’re all subjected to the consequences of our inane, stupid, idiotic, brilliant or dreary decisions, even if those consequences end up being a net nil. So it was a number of years ago that I started looking into the financial pages of the world, to try and carve out a better niche for myself than my forefathers had before me. Make no mistake; I wasn’t a “poor” kid growing up. Not at all as I had many of the nice things we all strove for as children in the suburbs, like chicks with our necks craning for the worms dangling from our mother’s mouth.
But if there was one behavior that I could never get my head around it was dealing with all the rhetoric and nonsense that went along with the commercial banking world. I just could not understand why so many people, my parents included, were so egregiously predisposed towards the bank. Every month it was something I always dreaded, the bank statement. In an age before computer banking but well into the time of the ATM fee, I was always so puzzled. “There’s got to be another way,” I thought.
A favorite movie of mine growing up was LA Story with Steve Martin. There’s a scene in that movie which went well over my head the first time I saw it, but sort of gets at the root of the argument against commercial banking. Mr. Martin and Sarah Jessica Parker are out on a date and they’re waiting on a conspicuous line. Mr. Martin’s character is listening and Ms. Parker’s character is explaining about her job as a model who points at things. As this line moves along and they get closer to the front, you see that they’re waiting on a line at an outdoor bank ATM. As people withdraw money, there’s an adjacent line of burglars who are holding them up for the money they just took out of the bank. When I say “holding them up” this is a comedy remember. Mr. Martin pulls out his bills and raises his hands as the burglar approaches: “Hello, my name is Bob, I’ll be your robber,” and Mr. Martin doesn’t flinch. He robotically hands the money he just took from the machine, continues his conversation, as Bob wanders off, “Thank You very much.” A metaphor, perhaps, for the crime that the Los Angeles of the early 1990’s was infamous for; more largely this speaks volumes for the commercial banking industry. As soon as we put it in and we think that the money is in fact ours, then we’re blind sighted by any of the scores of fees and other hand wringing that the commercial banking industry wants to use as excuses to take our money.
As I grew older I was introduced to commercial banking myself and for years I tolerated it. But I had done some research of my own and all the while co-existed with a separate account. You see, for the last eleven years, I’ve had a money market account. This account, which existed outside the realm of my ordinary transactions and was first held with a mutual fund company, Strong Funds, was, for all intents, my “savings” account. As I contiued to read up on investing, I came across a company called Fidelity Investments. Feeling something of an allegiance to Strong though, it took me a few years to move my money over to this much more well managed company where I immediately saw a difference.
Fidelity offered all sorts of great things such as free Visa debit card, free checks, and direct deposit. I began moving more and more of my money over to Fidelity, yet I still maintained a commercial bank account. Looking back on it, the move seems sort of nonsensical that I would keep going with the commercial bank, at this juncture and finally, Chase Manhattan. But this was the stigma which existed. This is where it lay squarely and keeping that commercial bank account was what we all had to do.
Well, folks, it’s 2007 and I’m here to say that such a stigma should no longer exist. I have been away from commercial banking since before the first of the year and I couldn’t be happier. The service and benefits I get from Fidelity are beyond compare. Not only is direct deposit available to me, but I also make money on my money! Because the Fidelity account is a money market account, you earn interest on your money, just by letting it sit and do nothing.
Another point of contention for me against Chase was their over limit fee. Well, with Fidelity, there is no such thing. I don’t make a regular habit of bouncing checks but it felt like, every time my balance got low and I had to write a check, incoming money would always appear in my account just AFTER the check dipping me below my available amount had posted. Chase was notorious for that. Now, not only does Fidelity not charge me a fee, but they don’t do anything. If I’ve written a check and the money isn’t available yet, they’ll just hold the check. If the money’s not pending, then they’ll just return the check. With no fee! What a concept! You still need to deal with the angry creditor you wrote the check to but there are no fees, which just that in itself is a boon enough to never go back to Chase bank again.
I have an old Quicken account which contains records of my business with Chase just last year, which was unfortunately not my most proud moment. But my business with the bank didn’t make it any easier. In my crude guesstimation it appears that there was at least $500.00 last year spent in fees to the bank alone. This year to date with Fidelity I’ve already made $50.00 in non taxable dividends on the money that’s been in my account. Fifty bucks isn’t a lot but plus fifty vs. minus five hundred? I think you know which one I’m happier with!
Now, some would say I needed to get my financial house in order, which is true. But the one thing about that is Chase was part of the problem. By telling me that my money would clear on a certain day and then holding it for “verification” or whatever else they felt like doing, they held me hostage to the whims of their accounting department. This behavior of them turned my small paper cut into a much larger flesh wound. That’s just not right.
Some would say “well what about Overdraft! Why not just get a line of overdraft protection?” Yes. Okay. I had overdraft (at one point) and that just became the ‘extra’ amount I could afford to spend; it was like money I didn’t have. Or, actually, it was money I didn’t have and it was just another accumulating bill I had to deal with and it’s corrosive and no way to live.
So, how does Fidelity stack up against Chase? Well, Fidelity also offers online banking and with the advances in making payments using your debit card online and things, there’s never a problem. Just today, I ordered groceries and bought Mets tickets with my Fidelity Visa debit card. It’s a snap!
As full disclosure, money market accounts are not FDIC insured. So your money’s “out there!” If you’re a conspiracy theorist or are convinced that the US treasury is going to fail or that the stock market is ready to implode, then maybe a money market isn’t for you (but then again, what’s the “insurance” of a corrupt organization like the US government worth if their infrastructure has just failed anyway?) Money market funds are not stocks, so don’t be fooled. They’re an investment which strives to maintain a one dollar value; based on the understanding that the US dollar is still worth a dollar. If the day ever comes where the dollar crashes amidst its own people, then we’re ALL in trouble.
One final caveat is that Fidelity doesn’t deal with cash so if you’re a big ATM user, then you’re going to get slapped with fees (from the bank you’re withdrawing from). Though the funds through the Fidelity fund I’m a part of (Fidelity New York Municipal Money Market Fund – FNYXX) are actually held at United Missouri Bank; I’ve never been to Missouri though I wonder if I could get cash from their ATM’s if they had any.
My money woes are something of over (for now) and while it’s true they could return at any moment, I feel like, so long as I continue to work hard and keep my nose clean, then everything should be okay for me. Having my money in a money market and in a larger scope, the stock market, does not just give me a free pass to do whatever I want. I still need to remain attentive to what’s going on in the world and I need to be ready to take flight at the first sign that something’s amiss. So if you’re curious, find out more! The information is available and there, so go after it if you’re fed up with banks as I was!
While the decision I made to leave commercial banking is my own, it’s a decision we each need to come to in our own time.
