A reader told me he was just shut down from his Charles Schwab checking account. This may be the first I’ve heard of a Schwab shutdown, so I asked him if I could write about it so we can all learn what the boundaries are for these banks. The reason for shutdown was very easy – the reader told me he was receiving 6 figures of incoming wire transfers into the checking account for the past 8 months or so. My gut tells me this was just too risky for Schwab’s tastes.
I think if you want to be receiving that high volume of incoming wires, I would suggest you open up a business checking account so you can easily explain the large volume. The reader could have also spread the love among other banks (no ML issues with that since this isn’t cash.) On the bright side, at least it was Schwab and not Chase. It looks like they are also going to close his brokerage account, but not his retirement account. In hindsight, he should have just used a CU that he has no other relationship with to not even have to worry about the whole brokerage/retirement account issue.