Good, Dangerous, and Setup Finest Observe

Financial institution of America emailed me final month to inform me it had been 10 years since I joined its Most well-liked Rewards program. This program presents 2.625% rewards on a bank card when you will have $100,000 mixed at Financial institution of America and its affiliated brokerage, Merrill Edge (see Financial institution of America Journey Rewards Card Pays 2.625% on All the things).

I just like the Financial institution of America bank card with the Most well-liked Rewards program as a result of it’s easy after a one-time setup. I get good rewards on each buy, and there’s no annual price, particular classes to recollect or juggle, or greenback caps.

Financial institution of America lastly received some competitors after 10 years. It got here from U.S. Financial institution, the fifth largest financial institution within the nation by complete deposits. Just lately, U.S. Financial institution launched a Neatly Visa card with an identical construction. It offers 4% rewards when you will have $100,000 mixed at U.S. Financial institution and its affiliated brokerage, U.S. Bancorp Investments. I heard about this new card from the Frugal Professor weblog.

I made a decision to modify as a result of this Neatly card from U.S. Financial institution presents the identical simplicity with larger rewards: no annual price, no particular classes to recollect or juggle, and no greenback caps. It satisfies my choice to make use of one card for every part. I’ll shut my Financial institution of America and Merrill Edge accounts after I totally transition over.

This isn’t a sponsored submit. It accommodates no affiliate hyperlinks. I’ve no relationship with any financial institution or dealer besides as a buyer.

Required Accounts

Right here’s what you want to earn 4% rewards on each buy:

1. U.S. Financial institution Neatly Visa card. The bottom reward is 2%. You get larger rewards when you will have different accounts with U.S. Financial institution.

2. U.S. Financial institution Neatly Checking account. A checking account is technically optionally available however you’re implicitly anticipated to have it as a result of most different U.S. Financial institution clients have a checking account with the financial institution.

The Neatly checking account is free and requires no minimal stability or direct deposit when you will have a U.S. Financial institution bank card. Having a free checking account additionally offers you 100 free on-line inventory and ETF trades per yr within the brokerage account.

3. U.S. Financial institution Neatly Financial savings account. The Neatly financial savings account is required to earn greater than the bottom 2% rewards on the Neatly bank card. It’s free with no minimal stability when you will have a U.S. Financial institution bank card. You deposit the rewards within the financial savings account.

4. Investments price $100,000 or extra in a self-directed brokerage account with U.S. Bancorp Investments. One of the best ways to fulfill the $100,000 requirement is by transferring investments price $100,000 or extra to a self-directed brokerage account with U.S. Bancorp Investments. You don’t need to commerce within the brokerage account. Solely holding the investments within the account will increase your bank card rewards to 4%.

If you happen to’re married and also you need separate card accounts for every partner (not one particular person as a certified consumer on the opposite particular person’s card), a joint taxable brokerage account holding $100,000 in investments makes each of you eligible for 4% rewards in your respective playing cards. If you happen to should use an IRA, solely the IRA proprietor’s card will get 4% rewards. The IRA proprietor can add the partner as a certified consumer on his or her card.

The checking account and the financial savings account might be joint accounts. I preserve $10 in every account. Conserving $10 avoids seeing a unfavourable stability when the account fees a upkeep price earlier than it instantly credit a price waiver.

What Works Nicely

The 4% bank card rewards are the motivation for this entire package deal. It’s simple after a one-time setup. I certified for the utmost 4% rewards only some days after a brokerage account switch introduced the mixed balances above $100,000. As an example, this $15 transaction earned 4% in reward factors:

One reward level is price $0.01 whenever you redeem it into the checking or financial savings account at U.S. Financial institution (minimal 2,500 factors = $25 per redemption). You’ll be able to switch the money to the bank card as a cost.

Good Card Design

The Neatly Visa card appears to be like and feels premium within the hand as a result of it’s black and steel. It doesn’t matter a lot although whenever you use Apple Pay or Google Pay.

Web site and Cellular App

The U.S. Financial institution on-line banking web site and cell app work nicely. It was straightforward to arrange paperless statements for all accounts and autopay for the bank card, change the PIN on the playing cards, and lock the debit playing cards. The cell app makes use of biometrics for login safety.

Transactions show properly in on-line banking and the cell app. You’ll be able to obtain the bank card transactions in CSV or QFX format to import into private finance software program comparable to Quicken.

Financial institution of America reveals this for a purchase order at a Walmart:

U.S. Financial institution reveals this:

U.S. Financial institution translated the outline “WM SUPERCENTER #4696” right into a extra recognizable service provider title “Walmart” with a emblem. This provides a pleasant contact. I haven’t seen different banks doing it.

Good Cash Market Funds in Brokerage Account

In contrast to Merrill Edge, U.S. Financial institution’s brokerage service doesn’t promote itself independently. Each brokerage buyer is assumed to be a financial institution buyer. You log in to the financial institution’s web site to entry the brokerage account. The banking facet and the investing facet have separate cell apps although.

The brokerage account is totally practical for a way I’ll use it. I’m holding one ETF price slightly over $100,000, which pays about $500 in dividends per quarter. I’ll switch the dividends to the bank card as funds.

There’s no price to purchase a cash market fund within the brokerage account. I put $100 in Gabelli U.S. Treasury Cash Market Fund Class I (GABXX, 0.08% expense ratio) as a take a look at and paid no price. Different folks purchased Vanguard Treasury Cash Market Fund (VUSXX, 0.09% expense ratio) and paid no price. The order entry web page shows a $25 price for purchasing VUSXX however no price was charged.

The Downsides

This setup with U.S. Financial institution has some downsides that don’t trouble me. It’s not for you if any of those is a deal breaker.

International Transaction Price

The Neatly Visa card has a 3% international transaction price. You continue to web 1% after the price. You should utilize a special card for international transactions however the no-fee card has to pay greater than 1% on these purchases to make a distinction. If you happen to spend $5,000/yr on international transactions, utilizing a 2% card with no international transaction price solely nets you $50.

I’m inclined to only eat the three% price and never trouble switching as a result of I don’t spend that a lot on international transactions.

Skimpy Card Advantages

Though the cardboard appears to be like and feels premium bodily, it comes with few ancillary advantages. It doesn’t have prolonged guarantee or secondary rental automobile insurance coverage. My Financial institution of America card has these advantages however I haven’t had any likelihood to make use of them within the final 10 years. If prolonged guarantee or secondary rental automobile insurance coverage is necessary to you, you should keep in mind to make use of a special card on transactions you need to cowl.

No FICO Rating

Financial institution of America reveals a FICO 8 credit score rating from TransUnion month-to-month at no cost in the event you choose in for it. U.S. Financial institution additionally presents a free credit score rating month-to-month but it surely’s primarily based on the VantageScore 3.0 mannequin, which fewer lenders use. Seeing a FICO rating is sweet however not important to me.

Solely Electronic mail or SMS for 2FA

U.S. Financial institution’s web site solely makes use of e-mail or SMS for two-factor authentication. It doesn’t settle for a Google Voice quantity for SMS. You have to ensure to safe your e-mail and cell quantity. I activated the additional safety function supplied by my cell provider to guard towards unauthorized porting-out requests.

Low ACH Limits

The utmost quantity of ACH push I can provoke at U.S. Financial institution is $1,500 per day and $3,000 per week. Possibly I’ve these low limits solely as a result of my accounts are new. The low limits don’t have an effect on me as a result of I don’t have to switch any cash out. I’ll use the month-to-month bank card rewards and the quarterly dividends to pay towards the bank card.

Attainable $50 Annual Price

The brokerage account lists a $50 annual price within the price schedule. Buyer Service reps stated verbally that the price is waived when you will have $100,000 within the brokerage account. It’s not a giant deal both approach. I’m OK with paying the $50 price in case customer support reps misspoke.

Designating Beneficiaries Requires a Type

Designating beneficiaries for the brokerage account requires mailing a paper type or calling customer support to rearrange for e-signing. It doesn’t trouble me as a result of it’s solely a one-time process.

Altering Dividend Reinvestment Requires Calling

Altering the dividend reinvestment setting within the brokerage account requires calling customer support. The default setting is completely different between mutual funds and shares/ETFs.

If you happen to switch in mutual fund shares, dividend reinvestment is routinely enabled. You’ll want to name customer support in order for you it turned off. If you happen to switch in shares or ETFs, dividend reinvestment is off by default. You’ll want to name customer support in order for you it turned on.

I didn’t need to name as a result of the default conduct matches my choice. I transferred in an ETF and I don’t need to reinvest dividends. I’ll switch the dividends as a cost to the bank card.

If you happen to’re not fazed by these small downsides, listed here are some notes that will provide help to in opening and organising your accounts.

Apply In Particular person

U.S. Financial institution doesn’t have as many branches as Chase, Wells Fargo, or Financial institution of America. I learn a little bit of its historical past on Wikipedia. A Minnesota financial institution purchased an Oregon financial institution. An Ohio financial institution purchased a Wisconsin financial institution. The Ohio-Wisconsin financial institution purchased the Minnesota-Oregon financial institution and have become immediately’s U.S. Financial institution. Its branches are in these states based on the web site Financial institution Department Locator:

When you’ve got a U.S. Financial institution department close to you, one of the simplest ways to open the required accounts is to use in particular person at a department. The financial institution personnel can assist you clean out issues in case you encounter points. You might also assist an area particular person get a small bonus or meet the gross sales objectives.

You’ll be able to apply for every part on-line however be ready to run into small bumps. The blogger Frugal Professor stated he tried many occasions to open a U.S. Financial institution financial savings account on-line but it surely didn’t work for him even after unfreezing credit score and ChexSystems. It solely labored when he utilized at a department and the banker referred to as their again workplace to push it by means of.

After I utilized for a joint financial savings account on-line, my a part of the applying was accepted immediately however my spouse’s half was declined. I ended up with a financial savings account in my title solely. She acquired a letter after per week telling her to name the ID Verification division however the telephone quantity all the time had lengthy wait occasions. She gave up and utilized on-line once more for her personal financial savings account. Her second software acquired a response “We’ll overview it and get again to you.” Fortuitously, it was accepted the following day.

Apply On-line

If you happen to don’t have a U.S. department close to you or in the event you choose to do every part on-line regardless of the potential bumps, apply for the bank card first. The Neatly Visa card is prominently featured on U.S. Financial institution’s web site. If you happen to don’t get accepted for the bank card or if the accepted credit score restrict is just too low, you’ll be able to name to request a guide overview. In the event that they nonetheless refuse to approve you or improve your credit score restrict, you received’t need to open the opposite accounts.

When you’ve got a credit score freeze with the three main credit score bureaus, keep in mind to thaw your credit score quickly earlier than you apply. It’s unpredictable from which bureau the system will pull. I had the pull from TransUnion.

No Google Voice Quantity

Don’t give a Google Voice quantity whenever you apply on-line. U.S. Financial institution doesn’t like Google Voice numbers. I’m guessing my spouse’s first software for the joint financial savings account was declined as a result of she gave her Google Voice quantity within the software.

Checking Account

Apply for the Neatly checking account subsequent. Though a checking account is technically optionally available within the setup, you’re implicitly anticipated to have one. Whenever you name customer support on the brokerage facet, the telephone system asks for a PIN. That PIN is the debit card PIN out of your checking account.

The checking account is free and requires no minimal stability or direct deposit when you will have a U.S. Financial institution bank card. It offers you 100 free trades per yr within the brokerage account. Chances are you’ll not want these free trades however you would possibly as nicely have a checking account as a result of most different financial institution clients have one.

U.S. Financial institution is providing a $450 bonus proper now for opening a brand new Neatly checking account and making no less than two direct deposits for a mixed complete of $8,000 inside 90 days (ACH pushes from Constancy counted). This bonus promotion ends on April 17, 2025 however it might be prolonged. Remember to use the Apply button on the bonus promotion web page whenever you apply.

When you’ve got a safety freeze with ChexSystems, LexisNexis, or Innovis, keep in mind to schedule a short lived thaw earlier than you apply for both the checking account or the financial savings account. I noticed an inquiry on my ChexSystems report from LexisNexis Threat Options on behalf of U.S. Financial institution.

Brokerage Account Software

The self-directed brokerage account software presents two joint account sorts: joint tenant with rights of survivorship (JTWROS) and joint tenant in frequent. I assumed I selected the JTWROS choice however one way or the other I received an account as joint tenant in frequent. Possibly the choice shifted inadvertently once I used the down arrow key on the keyboard or the scroll wheel on the mouse to scroll the web page. I needed to shut that account and open a brand new one as JTWROS. Watch out to double-check every part earlier than you progress to the following web page of the applying.

I additionally encountered a bug within the brokerage software. My avenue deal with has two repeating digits as in 558 Elm Drive. As quickly as I typed the second repeating digit (“55”), the road deal with discipline froze and I couldn’t proceed. This occurred thrice earlier than I noticed what should be blamed for it. I needed to begin over, sort the non-repeating half first (“58 Elm Drive”), after which transfer the cursor to the correct place so as to add the repeating digit.

Brokerage Asset Switch

All brokerage asset transfers have to be requested from the receiving facet. If you happen to’re transferring property from a taxable account, take a screenshot or save to a PDF of the price foundation of the shares within the supply account earlier than you request a switch.

You see an choice to switch property within the high menu within the U.S. Bancorp Investments brokerage account:

If you happen to click on on it proper after the account is opened, it offers an error saying the account isn’t eligible to switch property. That error solely means the account isn’t prepared but. They nonetheless have to arrange some issues within the backend. The error disappears after two or three enterprise days.

The web asset switch request has a spot to connect a press release from the supply account. I acquired an error saying the system wasn’t out there once I tried to connect a press release. Different folks received the identical error. It doesn’t sound like a short lived glitch. Not attaching a press release didn’t forestall the asset switch although.

I used to be transferring from Constancy. Constancy emailed me the following day saying they acquired the switch request however I didn’t see the property leaving Constancy. I waited per week earlier than I referred to as Constancy solely to be instructed that Constancy had rejected the switch request from U.S. Financial institution as a result of it was lacking one thing. I think that the switch request I crammed out on-line needed to be re-keyed by somebody in U.S. Financial institution’s again workplace into the asset switch system and so they keyed one thing flawed.

I needed to resubmit the web asset switch request. The second try succeeded. I acquired the identical notification the following day when Constancy acquired the request. I noticed the shares leaving Constancy on that very same day and so they appeared within the U.S. Financial institution brokerage account in one other two enterprise days.

Affirm Value Foundation

If you happen to switch property from a taxable brokerage account, it’s necessary to substantiate that the price foundation of the shares came to visit appropriately. The associated fee foundation data journey individually from the shares. They often arrive later than the shares. Wait per week or two to examine the price foundation data within the new brokerage account.

Click on on “Account Particulars” within the high menu after which “Unrealized acquire/loss.”

You will note the variety of shares, the date acquired, and the price foundation per share whenever you click on on the “+” signal to develop every holding. Your unique dealer is answerable for sending the price foundation to U.S. Bankcorp Investments. Contact the supply dealer in the event you don’t see any value foundation within the new account or if the price foundation data don’t match the screenshot or PDF you saved earlier than the switch.

***

Opening the accounts and setting them up took some effort and time. It’s all clean on autopilot now. My actions in all U.S. Financial institution accounts come all the way down to:

1. Use the bank card for all purchases.
2. Redeem rewards into the financial savings account (month-to-month).
3. Switch the rewards deposit to the bank card as a cost.
4. Obtain dividends within the brokerage account (quarterly).
5. Switch the dividends to the bank card as a cost.
6. U.S. Financial institution debits an exterior account on autopay (month-to-month).

All cash generated within the U.S. Financial institution accounts stays inside U.S. Financial institution. There received’t be any transfers to or from an exterior account besides the autopay.