Wednesday, April 02, 2008

No International ATM Fees with Schwab

After writing about our recommendation of the Schwab checking account that reimburses all foreign ATM fees, a reader asked about our experience with it. Frankly, we had continued to use our Bank of Internet ATM card overseas, but now we’ve finally opened the Schwab account and acquired the accompanying ATM card.

The Schwab “High Yield Investor Checking Account” is simply a typical on-line bank account with a few twists. It requires you to open a Schwab brokerage account, but there is no charge for the brokerage account – nor any requirement that you use the brokerage functions. The checking account pays competitive rates (currently around 3%) with no minimum balance requirements and no service charges.

Upon opening the account, we received a personalized welcome email (not some canned PR crap), and massive amounts of support materials. We were very impressed, especially compared to other no-fee, on-line accounts we’ve opened.

The account promises (quoting the Schwab materials): “No ATM fees. We reimburse any ATM fee you are charged – worldwide.” This seems pretty unambiguous to us. The card is a combo Debit/ATM Visa card (usable on Visa/Plus/Interlink ATM networks worldwide), and allows $1,000 in ATM withdrawals per day. (Note that most individual ATMs do not allow that maximum per machine. If you need that much cash per day, you may need to hit several different ATMs.)

We believe ATM withdrawals are the best way to get cash on your international travels – far better than banks or money changers. For international travel our suggestions remain: Get a no-foreign-exchange-fee ATM card (such as this Schwab card), and use a Capital One credit card (which does not add the typical 3% foreign-exchange fee to credit-card charges) for all your non-cash purchases.