Banking: Best online bank, checking or borrowing alternatives – Jan. 13, 2012

An old article but still interesting. I use a credit union (SAFE) / Brokerage (Scottrade) combo myself and recommend it (actually vanguard if you have $3k to play with). I use the credit union for checking, bill payment, car loan, and the cash (CD) portion of long term savings. I use the brokerage account strictly for equity investments.

I just recommended Vanguard to a client for brokerage services. Why? First, commission free trading of vanguard ETFs. This will come in handy as I refine my sector ETF approach that requires more frequent transactions. Vanguard has some of the lowest, if not the lowest, sector index ETF expense ratios and a wide range of sectors to choose from.

The second reason is that ETFs are more flexible than mutual funds in the event you need access to your money. Mutual funds tend to have early redemption fees if you sell within 90 days. ETFs do not.

So, I like Vanguard for commission free trading of a wide range of low expense ratio index ETFs. Schwab, e-trade, and scottrade could also work but you will have to find alternatives to Vanguard ETFs for commission free trading. In particular, finding a wide range of low expense ratio commission free sector ETFs is difficult at non-Vanguard brokerages.

Happy investing everyone…

http://money.cnn.com/2012/01/13/pf/online_banking.moneymag/

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