Yeah, I’m aware, and I did try using my savings account that way for a time. However, I do find value in separate “checking” and “savings” accounts for money organization. Basically, here’s how my money flow goes:
Paycheck -> savings
Recurring transfer savings -> checking for spending
Manual transfer checking <-> savings as needed
But you’re right, you can get most of the benefit by using a savings as checking (or have checking auto draft from savings). I keep a budget, and this structure keeps me honest (I guess I could have two savings and get the same result).
However, the bank account can’t fulfill other benefits, like state tax savings on interest or the ability to invest part of my savings into t-bills or funds(I can get a CD though). I’ll also need a brokerage account regardless (I’m not getting an HSA through my bank), so this helps consolidate my accounts a bit, and it turns out the debit card is way better than any bank account I’ve had.
What happens if SoFi no longer has the best rates? You either accept that or move elsewhere. You already need direct deposit to get the best rates, when will they add needing debit card transactions as well? That kind of thing is pretty common with banks since they may not need to be as aggressive in getting deposits at some point if the loan market cools. I think that’s a lot less likely to happen at a brokerage, and even if it does, I can just buy other assets, like CDs , Treasuries, etc. So I expect the brokerage to offer a better product more consistently.
I’m not saying anyone should switch immediately, only to consider a brokerage the next time they go shopping for a new account.
Selling while the market is down well still put you ahead of cash returns
I don’t think that’s necessarily true, it all comes down to when you’re likely to need that cash and how much the market has tanked. By the time you have enough assets that the difference doesn’t matter, you also have enough assets where the extra you’d potentially get by investing it doesn’t matter.
Regardless, that’s not really what this is about. I’m discussing bank vs brokerage account, not investing vs not investing cash reserves…