Using Fidelity Cash Management accounts for fun and profit

One of the great things about my former employer was how easy it was to configure my paycheck to be deposited into multiple accounts each month, triggering benefits like:

• Waived Bluebird ATM fees;
• Santander's Extra20 direct deposit and bill pay bonuses;
• Mango Money's 6% APY savings account;
• Waived monthly fees on many checking accounts.

With the loss of a steady paycheck, I also lost the ability to meet those requirements the old-fashioned way.

Many banks allow you to pull money into accounts for free

While the Bank of America Alaska Airlines debit card was still in play, it was easy to deposit money into any local bank or credit union and then use Bank of America's website to "pull" money from those accounts into your mile-earning checking account.

Likewise, today Suntrust will allow you to pull money from any external bank account into your Delta Skymile-earning checking account for free (although unlike with Bank of America's "next-day" transfers, Suntrust transfers invariably take 3 business days).

It's harder to push money for free

When it comes to "pushing" money, that is, initiating a transfer on the side of the bank holding the money you wish to transfer, most brick-and-mortar banks will charge for the privilege. There are exceptions, but most of them are not particularly promising:

• Bluebird allows you link only one external account at a time (I use this to meet my $1,500 direct deposit requirement with Santander);
• PayPal does allow you to link multiple external accounts, but if you use your PayPal account for other activities you may not want to draw additional attention to the account by abusing the privilege. Further, many members of the community have a concentrated dislike for PayPal, due to their habit of freezing and holding clients' money for weeks or months;
• Online banks are typically more flexible, since they know they need to be as customer-friendly as possible to retain their clients' business.

Fidelity Cash Management accounts are quite flexible

I love my Fidelity Investment Rewards American Express card, and recommend it to anyone who will listen as the single best no-annual-fee cash back credit card for the non-travel-hacker in your life.

The card's not perfect, however, and one of its drawbacks is that to receive the full 2% cash back, you have to redeem the points you earn into an account held at Fidelity. Fortunately, that account can be a Cash Management account, which works just like a checking account (they'll even mail you a debit card you can use to withdraw money).

Since Fidelity Cash Management accounts are intended to hold money before buying and after selling securities, they allow free pushes to and pulls from any linked bank account.

There are some caveats, however.

Pulls take a long time

"Three-to-five business days" is fairly standard boilerplate for ACH transfers between US banks, one reason why Bank of America's next-day transfers were such a blessing. In reality, that generally means 3 business days after the ACH transfer is initiated; since late evening transfers might not be initiated until the next business day, and the receiving bank might not process the transfer until the day after it's received, you end up with 5 business days as the upper limit for such transfers.

Fidelity Cash Management accounts press against that limit. While my funds were immediately debited from my external account, they were not made available for withdrawal until the 4th business day after the transfer was initiated. This is even more disconcerting since they appeared available immediately in the Cash Management account for the purchase of securities – just not for withdrawal.

In other words, if you plan to move money into an account which requires monthly direct deposits, plan to start the transfer process earlier in your statement cycle, rather than later.

Banks treat ACH transfers from different sources differently

While I'm sure my Fidelity transfers will keep my Mango Money savings account eligible for 6% APY interest, every bank has its own policies regarding what kinds of deposits will count for purposes like waived monthly maintenance fees.

The FatWallet community has put together a very admirable list of various banking products and the ACH transfers they do and do not treat as "direct deposits," although many of the datapoints are quite old, so you'll need to do your own due diligence.

In other words, like so much else in this world, your miles may vary.