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up vote 8 down vote favorite

I've noticed (for awhile now) that my online discount brokerage account carries many features of a traditional bank account:

  • Online bill pay
  • Direct Deposit
  • Checks
  • ATM Card
  • FDIC or SIPC coverage
  • Cash transfers to/from external accounts

Considering this type of account also offers an insane selection of short and long term investment options, I'm wondering what are the cons to using this account for day to day banking.

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None. I use my brokerage's checking account and it has some of the best features out there. It is just a selling tool the brokerage uses to get you to invest. No secret. – MrChrister♦ Nov 27 '12 at 2:20
Welcome to Money.SE PilotCam! Great first question! – C. Ross♦ Nov 27 '12 at 14:22

2 Answers

up vote 4 down vote accepted

Make sure you understand the difference between SIPC (Broker-dealer failure) and FDIC coverage, and which funds are protected by which insurance.

Evaluate the account knowing that it is online only, and make sure that the fees and limits work for you.

It takes an awareness of the difference between your investment funds and your normal day-to-day operating funds. Some individuals have trouble separating these types of funds in their mind, and do better keeping them in separate entities.

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up vote 2 down vote

I think the disadvantage is there fewer branches where you can go in case you need full service, like deposit a lot of checks (mobile deposits have a low limit), get a cashier check, safe deposit box, etc.

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2  
These are the same limits that any online only bank has. – mhoran_psprep Nov 27 '12 at 10:58
yes, that's true. Though brokerage companies have some branches. – Vitalik Nov 27 '12 at 12:47
+1 - good point about the ability to get a cashier's check. Not needed very often, but important to get one when needed. – JoeTaxpayer Nov 27 '12 at 17:47

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