The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Gatzbie on December 10, 2023, 02:48:09 PM
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Hello All,
Wells Fargo currently has a promotion going on where if you open a premier checking account with them and move >$250k worth of investments to it, you get $2,500 (as long as your balance stays >$250k for 45 days).
I could rollover index funds currently passively growing in 401k into IRA then ACAT into Wells Fargo Premier checking account to get the $2,500. The rollover would be in-kind so I wouldn't have to sell investments & not be in the market for any duration. Also, i would be moving $320k of investments so low chance of it dipping below $250k to not get the bonus.
Struggling to see any downsides of doing this. Am I missing anything here?
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I wouldn't. Too much hassle to move accounts around for too little reward. Plus, I haven't heard that WF is one of the cheap fees places, so if the fees are higher than what you're currently paying you're losing money there.
Plus, it's Wells Fargo. They do not have a squeaky clean history. None of the big banks do, but WF is one of the worse ones.
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I wouldn't. Too much hassle to move accounts around for too little reward. Plus, I haven't heard that WF is one of the cheap fees places, so if the fees are higher than what you're currently paying you're losing money there.
Plus, it's Wells Fargo. They do not have a squeaky clean history. None of the big banks do, but WF is one of the worse ones.
Hmmm from what I understood was that I would be able to keep investments still the same (low-fee Vanguard/Fidelity index funds). I will double check to make sure this would still be the case if I were to do. Also make sure no other hidden fees exist.
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I saw this offer, and I say no. If you're going to put $250k cash somewhere, Capital One is offering 4.3% APY in savings accounts or 4.35% in a 6-month CD ($5380 in 6 months) so you could park that cash there and earn a similar "bonus" without any fees to worry about. It would take longer than 45 days but for me, not having to deal with Wells Fargo would be worth the tradeoff.
Edit to add: the 12-month CD rate is over 5% at some banks including Cap One, and SoFi is still offering 4.6% APY with direct deposit (no fees at SoFi either). So there are other options if you're looking to get out of investments and into cash.
Edit again: okay, so this wouldn't require a cashout. Still... a 1% bonus doesn't seem worth the hassle to me.
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I saw this offer, and I say no. If you're going to put $250k cash somewhere, Capital One is offering 4.3% APY in savings accounts or 4.35% in a 6-month CD ($5380 in 6 months) so you could park that cash there and earn a similar "bonus" without any fees to worry about. It would take longer than 45 days but for me, not having to deal with Wells Fargo would be worth the tradeoff.
Edit to add: the 12-month CD rate is over 5% at some banks including Cap One, and SoFi is still offering 4.6% APY with direct deposit (no fees at SoFi either). So there are other options if you're looking to get out of investments and into cash.
Edit again: okay, so this wouldn't require a cashout. Still... a 1% bonus doesn't seem worth the hassle to me.
From what I understand, you can move IRA funds into the account which could remain in the Vanguard/Fidelity (Total stock market/S&P 500) index funds they are currently in? I see so far that Wells Fargo has a bad reputation out of the major banks.
EDIT: Is it a major hassle/time consuming process to ACAT stocks between entities? I have never done before. It appears this would be something to consider & Wells Fargo's reputation.
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Hello All,
Wells Fargo currently has a promotion going on where if you open a premier checking account with them and move >$250k worth of investments to it, you get $2,500 (as long as your balance stays >$250k for 45 days).
I could rollover index funds currently passively growing in 401k into IRA then ACAT into Wells Fargo Premier checking account to get the $2,500. The rollover would be in-kind so I wouldn't have to sell investments & not be in the market for any duration. Also, i would be moving $320k of investments so low chance of it dipping below $250k to not get the bonus.
Struggling to see any downsides of doing this. Am I missing anything here?
Two things stand out:
1. Typically the terms "ACAT" and "in-kind" and "in the market" would allude to moving investments around. AFAIK, you can't put investments into a checking account. So that's major roadblock #1.
2. You seem to be talking above moving investments from a 401(k) into a taxable checking account. Doing so would constitute either a loan or a distribution from the 401(k). If a loan, you'd probably pay more in interest than WF would pay you; if a distribution, you'd lose more in taxes than the WF bonus would pay.
Maybe *I'm* missing something.
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I did this offer starting in late June. It was easy-peasy, easy $2,500.
I transferred an IRA which stayed an IRA and transferred back out later.
$25 was required to open the checking account and that's where it stayed for a couple months.
I don't disagree about the bad opinion of WF. That was in part why I don't feel bad about doing this bonus with leaving ASAP. A relative still has large savings accounts with WF that are paying 0.25% interest. That's just crazy now.
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A lot of these bonus offers require you to leave the qualifying balance in cash, and the bonus is rarely much more than you would earn putting that same cash in a good money market fund for the required amount of time. Once the bonus is paid, the low interest rate causes you to lose money every day you leave your cash in the account. Avoid these offers.
This particular Wells Fargo offer seems to count investment balances, so it's much more worth considering. I have personally had a Wells Fargo checking account for a couple of decades, and while I'm certainly aware of plenty of shady stuff they (and all the other big banks) have done, they've always treated me fine. I added an investment account with them several years ago back when stock trading commissions were a common thing but they were offering some number of free trades to their higher-tier customers. I'm still at the premier level given the balance I have in investments with them. I get free ATM withdrawals anywhere and if I need to do something weird like get a cashier's check or do a wire transfer there's no fee for those either. These services are hardly unique to Wells Fargo, but hey...if you're being offered $2,500 to move some of your money I'd say it's definitely worth considering.
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I did this offer starting in late June. It was easy-peasy, easy $2,500.
I transferred an IRA which stayed an IRA and transferred back out later.
$25 was required to open the checking account and that's where it stayed for a couple months.
I don't disagree about the bad opinion of WF. That was in part why I don't feel bad about doing this bonus with leaving ASAP. A relative still has large savings accounts with WF that are paying 0.25% interest. That's just crazy now.
I'm glad to hear you had a good experience. I did a CC sign up bonus with them and am counting down the days when I can close this account. I won't ever do business with them again.
If anyone is interested in the details here is what bothered me about them:
1. I still don't know if I got the spend bonus. I'm assuming I did but it is nowhere on the transactions and when I called them they couldn't tell me where it was on the list of transactions. I got the runaround from the person over the phone. Then someone called me back about a month later. I missed the call and decided it wasn't worth the hassle. It's a simple question that should have a simple answer.
2. It is a cash back CC. I used the cash back towards my balance. Then I paid the bill a few days later. They bounced back my payment and said my payment was going to be late. Why? Because I over paid (the amount I paid was the correct balance but in the meantime the cash back went into my balance and apparently their system cannot deal with this.). I did not incur a late fee because I was quick on the trigger.
3. Next time I paid the balance I knew to use the cash back a week or so in advance so I did that. Still it messed with my payment and I had to go in and adjust my payment by mere pennies so they would accept it. At that point I figured this was not a bug but a tactic to make more money on late fees.
I have not used the card since and as I already mentioned, I cannot wait to close this account in a couple of months.
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A lot of these bonus offers require you to leave the qualifying balance in cash, and the bonus is rarely much more than you would earn putting that same cash in a good money market fund for the required amount of time. Once the bonus is paid, the low interest rate causes you to lose money every day you leave your cash in the account. Avoid these offers.
This particular Wells Fargo offer seems to count investment balances, so it's much more worth considering. I have personally had a Wells Fargo checking account for a couple of decades, and while I'm certainly aware of plenty of shady stuff they (and all the other big banks) have done, they've always treated me fine. I added an investment account with them several years ago back when stock trading commissions were a common thing but they were offering some number of free trades to their higher-tier customers. I'm still at the premier level given the balance I have in investments with them. I get free ATM withdrawals anywhere and if I need to do something weird like get a cashier's check or do a wire transfer there's no fee for those either. These services are hardly unique to Wells Fargo, but hey...if you're being offered $2,500 to move some of your money I'd say it's definitely worth considering.
Yes, the appeal to me for this one is that it allows investment balances. I personally have not had issues with Wells Fargo (have had normal checking account sign up bonuses & CCs).
One thing I am trying to see is does transferring Vanguard index funds over to Wells Fargo for a few months then transferring back to Vanguard cause any headache with record keeping (Tax lots & performance tracking)? I called Vanguard on this & they said if you keep Vanguard accounts open with minimum balances at least, there shouldn't be any trouble with this.
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That's a great idea. We'll be selling a house in a few months, and I already have a Wells Fargo account so it wouldn't be more complicated. I got an IB bonus a couple years ago that ever since has just been sitting around earning market returns. It would be a cinch to top up the house sale to $250,000 and get $2,500 free.