josephstern

Yup - same home address, same last name. Different email, and probably, different phone.

Didn't do the kids, but that's an intriguing possibility. Anyone? Can kids even have brokerage accounts that aren't UGMA or similar?

frankiwa

So, you don't really have to keep the 100k in the account for the full 6 months???

I was gonna open a fidelity account anyway to be able to purchase a specific security my current broker won't let me purchase. Could i transfer 100,000 in to fidelity, wait for the miles to post, and then withdraw about 70,000 from the account days after the miles post, and just keep the 30,000 or so in the fidelity account for the 6 months.

AAUSTEX

I have the same question as frankiwa. Can anyone provide a data point on a recent account? It sounds like Fidelity is taking longer to disburse the miles. If 100k has to stay in the account for 6 months in order to earn the 50k miles, then it's not as good of a deal as keeping the money in BankDirect for 6 months (6x10,000=60k)

PedroNY

We used the same home address. I don't have any kids, but I don't see why that would matter, they didn't block my wife and I from doing it independently, even though we have same address and last name. You an always say "Apartment 2" in that address, that may help your case.

LH2004

If you keep the money at BankDirect, you'll get 60,000 miles and almost nothing else (0.05% * $100,000 * 6 months = ~$25 before tax). If you put the money at Fidelity, you'll get 50,000 miles and the entire investment return on anything you want. That's worth a lot more than 10,000 miles.

Happy

Or lose quite a bit on your investment - there is no guarantee the investment you pick now would gain in 6 months or even stay break even.

FWIW, current fidelity interest rate on the sweep account is about 0.05%. If you go the trouble to move the sweep account balance to a Money Market Fund, the highest you can achieve, is approx 0.08 to 0.10%.

That is based on the GUARANTEED return on your investment. Well, almost Guaranteed because the MMF is not FDIC but it would take the whole banking system goes under before Fido would go under - the firm controls more than 1/3 of the retirement assets in the country with big bulk of it through Employers' programs.

ExitRowAisle

Besides trying to figure out ways around Fidelity's stated minimums and holding times, one of the most relevant questions is whether or not Fidelity would give a current customer the difference in bonus miles (50,000 - 25,000) if he/she agree to move more assets into his/her account.

Fidelity is known for giving miles bonuses to current customers who add to their holdings as long as they didn't receive any miles when initially opening the account.

Whenever interest rates start going up and make Bank Direct's miles offer less enticing, that may be a worthwhile option for many people.

LH2004

The point is, moving money you want to keep safe to BankDirect costs something, in the form of lower interest rates; it's the right move if your value of 1.2 miles/year is lower than the lost interest per dollar (with appropriate tax adjustment). Moving investments you otherwise want to hold to Fidelity costs nothing beyond, maybe, a couple of $8 trades and any fee you'll pay to leave your current broker.

If you have $100,000 in the Vanguard Target Retirement 2040 Fund sitting at Vanguard, you can move that to $100,000 in the Vanguard Target Retirement 2040 Fund at Fidelity, get exactly the same investment returns and get 50,000 miles. That's miles for nothing but filling out some forms; you should do it even if miles are barely worth anything at all to you. If you have $100,000 sitting in a decent-yield bank account somewhere, and you're thinking about moving that to BankDirect, you have to do some math on whether it's a smart move; the math is going to be pretty easy if your value is above $.02 a mile, but not if it's in the neighborhood of $.01.

I'm not saying you should move your wealth out of a checking account and start trading options just to get the Fidelity miles -- though I do wonder how many people have a real need to keep a 6-figure sum in absolutely risk-free savings.

ExitRowAisle

I have to agree with Happy on this one. IMO, you are comparing apples and oranges when you start saying that you can either get the Bank Direct miles and nominal interest OR Fidelity miles and some unquantifiable return on more risky investments. By that logic, I could suggest that you take the $100,000 and put in on red on the roulette wheel in Las Vegas. If I get the right bounce, I'm $100,000 richer, which is worth more than 50,000 miles from Fidelity.

If you were comparing the miles bonuses at Fidelity, TD Ameritrade, and Sharebuilder, your argument may be a little more credible.

frankiwa

So, any word on whether or not you have to keep the full 100K in the account for the full 6 months?

ExitRowAisle

Who on this board can answer that question with any certainty at this very moment? No one will know until the 50,000 miles post, and this larger bonus has not been offered long enough for anyone to have any direct experience.

frankiwa

I meant with respect to the previous 25,000 mile offers. I'm sure if u could remove money earlier than the t&C suggest with the 25k offer, it will likely work with the 50k offer.

PedroNY

As I stated above, I had my miles post within 2 weeks and that was a few months ago. My wife is still waiting, it has been about 4 weeks, they told her it will take 6-8 weeks (not 6 months), I can tell all here when she gets her miles. This is under the old deal terms (Ex: 15,000 miles for $10k), not the new one (Ex: 50,000 miles for $100k).

As to statement above, this applies to BROKERAGE Accounts not retirement acounts. If you are investing in Vanguard Target Retirement 2040 Funds, it is likely happening through your 403(b), 401(a) or 401(k) accounts; that would not work for your deal here. If you actually have $100k in those funds in a Vanguard brokerage fund, there is another issue all together, I'd recommend to consider selling it all and at least buy straight up index funds that make up that fund; you will save a whole lot of money in fees over next 30 years. I know that is off topic, but just something to consider, you can rebalce every year just like they do in that fund, but save on the extra layer of management fees!

I think this deal should be compared with TD Ameritrade Deal and Bank Direct Deal, none of them are paying better than .1% yield. Of course that deal assumes that the money needs to sit full 6 months in these accounts, but that is probably not true as their reps been saying 6-8 weeks.

Best,

PedroNY

LH2004

We're now miles off the topic, but there are NO extra fees for Vanguard's funds of funds beyond those of the underlying funds. You save nothing by buying the index funds directly.

Lots of people hold these funds in ordinary accounts. (At Vanguard, it wouldn't be a brokerage account, you would hold them directly.)

jagoffee

Unless of course you purchased stock that you would have purchased in your existing stock account and then it would cost you nothing.