My mom (early 60s) has six figures sitting in a Chase savings account earning very little interest. I’ve suggested moving it to a HYSA (ex: Ally or Betterment), but she doesn’t trust online banks because there’s no physical branch.
Any advice on:
- How to help a parent feel comfortable with an FDIC-insured online HYSA (safe steps, “test transfer,” etc.)?
- Any brick-and-mortar banks/credit unions in Riverside County/Inland Empire with competitive savings/money market rates?
- Does it make sense to keep some at Chase for peace of mind and move the rest to a higher-yield account?
Right now, she wants to keep the money safe and easily accessible (not invested). However, since she plans to start investing in about a year, I suggested she speak with aFidelity advisor to begin preparing for that transition.
Helping my mom trust an online HYSA (Ally/Betterment) vs keeping savings at Chase — Riverside County branch options?
byu/MoH651U inpersonalfinance
Posted by MoH651U
5 Comments
Does she trust Fidelity?
Do they trust you?
I had/have similar issues with family.
In my case, I led by example. I showed what i was doing and for how long I had been doing it.
> However, since she plans to start investing in about a year
What’s stopping her from starting now? This is the real answer for money in the six figure range. Who cares about your day-to-day needs, that’s <$1000/yr in interest that’s being missed, rather than literal thousands.
But at the end of the day, do your research, if a savings account is needed in the interim, find a credit union, or major bank in the area that offers good rates. It may not rival the best online bank, but at least she’ll get 2-3% instead of 0-1%.
> Fidelity
They are generally recommended around here. They have good funds with competitive expense ratios. Given she is 60, she really needs to understand her strategy from now to age 85-90, so she has plan that sees her feeling financially secure.
They likely also offer some kind of savings product that will safely earn at least 3%. But telling you now, they’ll likely highly recommend she split off a significant portion into a typical retirement strategy for someone her age, by that I mean it will have a significant portion invested in bonds for stability.
Guessing she doesn’t have nay retirement accounts to save taxes?
Fidelity and Schwab have physical locations. They both offer cash accounts and money market/treasury funds. All earn similar (or more) than HYSA. And funds like SGOV save state tax.
You don’t need an advisor.
You should keep some in index funds to continue growth, and most in bonds/treasuries to keep value.
Its all accessible. Usually can get it transferred out of the brokerage within a day or 2.
And you should still have money in a local branch.
If she likes chase she could move her funds to chase brokerage and buy sgov etf or diverse some into index funds like voo depending on what her financial goals are.
Even if I personally believe that a brokerage invested in SGOV or VBIL is better, know that better rates exist out there, and have other banks that I much prefer… I think you’re going to have significantly better chances of converting someone like this over to Capital One than any other option on the market. They’re the 6th largest bank in the United States, have a real network of physical branches, ATMs, and cafes, and are a well known household name thanks to their huge marketing budget.
Not that she’d necessarily have any branches in the area to actually *use*, or that how big a bank is or how much marketing they do has any influence on how good they actually are. But that people like this will be far more receptive to the idea of opening an account with something they think of as an ‘actual bank’ than with an online-only institution they have never heard of before. I’ve found that older people seem to think ‘actual bank’ = is huge and has branches somewhere, rather than just whether they have a charter and FDIC insurance.