Fidelity's Cash Management Account and Schwab's Investor Checking are the two US accounts travellers mention in the same breath, because both do the thing most banks will not: they refund the fees foreign ATMs charge, wherever you are. For years they were described as interchangeable.
They are not quite. Fidelity's own fee disclosure says its debit card may add a foreign transaction fee of 1 percent that is not waived, while Schwab charges none. The two also refund ATM fees on a different schedule. Here is how each one behaves abroad, what the 1 percent costs on a real trip, and which card belongs in your wallet.
The Short Answer
For travel, Schwab is the better debit card. It charges no foreign transaction fee and refunds ATM operator fees worldwide with no cap. Fidelity refunds ATM fees too, and faster, but its card can add 1 percent to every purchase and withdrawal made in a foreign currency or processed abroad.
Fidelity still has a place. If you already keep your money at Fidelity, its card is a perfectly good way to get cash from a foreign ATM without paying the machine's fee: 1 percent is far less than a typical bank's $5 plus 3 percent. Just do not use it as your everyday card for purchases abroad when a no-fee card is available.
What Each Card Charges Abroad
Schwab Investor Checking. No foreign transaction fee on purchases or withdrawals. Conversion happens at the Visa network rate. ATM surcharges charged by the machine's owner are rebated without limit, credited at the end of each statement cycle. The account must be opened with a linked Schwab brokerage account, which costs nothing and does not need to be funded.
Fidelity Cash Management Account. No monthly fee and no minimum. Conversion happens at the Visa network rate, and Fidelity's fee schedule notes that a foreign transaction fee of 1 percent may be included in the amount charged to your account and is not waived. ATM fees charged by other institutions at machines showing the Visa, Plus or Star logos are reimbursed the same day they are debited. Some travellers report the 1 percent not appearing on particular withdrawals; plan as though it will.
Same network, same rate. Both are Visa debit cards, so the underlying exchange rate is the same. The difference between them is entirely the 1 percent on top, and the timing of the refunds.
The Math on a Real Trip
A two-week trip to Thailand. Thai bank machines charge foreign cards a flat fee of around 220 baht, roughly $6.50, on every withdrawal. Say you take out the equivalent of $300 four times and spend $2,000 on hotels, meals and tours by card.
With Schwab: the four machine fees, about $26, are refunded at the end of the statement cycle. No foreign transaction fee on the $1,200 of cash or the $2,000 of purchases. Extra cost beyond the Visa rate: $0.
With Fidelity: the four machine fees are refunded the same day. The 1 percent fee on $1,200 of withdrawals and $2,000 of purchases comes to about $32.
With a typical big-bank debit card: a $5 non-network fee per withdrawal, the 220 baht machine fee, and 3 percent on everything: roughly $142. Both Fidelity and Schwab are a huge improvement. Schwab is simply the cheaper of the two by the amount of the 1 percent. Our guide to avoiding ATM fees abroad breaks down each layer of that big-bank bill.
Spend Abroad Without the 1 Percent
Pair a fee-refunding debit card with a Wise card for purchases: it converts at the mid-market rate with a small visible fee and holds 40+ currencies, so you can lock in euros or yen before you fly.
Get the Wise Card →Free account, ~$9 card fee. Want cash on arrival? Order currency before you fly →
When the Refund Arrives
Fidelity: same day. The ATM operator's fee is debited and credited back on the same day. Your balance never looks short.
Schwab: end of the statement cycle. The rebate is paid as one credit when the monthly statement closes. On a long trip with many withdrawals that can mean $50 or more sitting outside your account for a few weeks. It always comes back, but if you run your balance tight, keep a margin.
Either way, the refund covers the operator's fee only. It does not cover a conversion you accepted on the machine's screen, and it does not refund a fee the machine never charged.
What Neither Card Refunds
Dynamic currency conversion. When a foreign ATM or card terminal offers to charge you in dollars at a guaranteed rate, that rate typically carries a markup of 3 to 10 percent. It is not an ATM fee, so neither Schwab nor Fidelity refunds it. Always choose the local currency. Our explainer on dynamic currency conversion shows the arithmetic.
Withdrawal caps that force several transactions. In countries where machines cap each withdrawal at a low amount, such as Thailand, Argentina or Vietnam, you pay the machine's fee several times. Both accounts refund each fee, but Fidelity's 1 percent applies to every withdrawal. See our guide to ATM withdrawal limits abroad.
Declines and fraud holds. Neither card is immune to a fraud flag on a first foreign withdrawal. Turn on app notifications so you can approve it quickly, and carry a second card from another bank.
Opening the Accounts
Schwab. Investor Checking is a bank account at Charles Schwab Bank, opened together with a Schwab One brokerage account. You do not have to invest or fund the brokerage account. Allow a week or two for the card to arrive before you travel.
Fidelity. The Cash Management Account is a brokerage account with banking features: your cash is swept to program banks for deposit insurance, and the debit card, cheques and bill pay work like a checking account. Opening it online takes minutes; the card follows by post.
Either way, start early. A card that arrives the day after you fly is no use. Order at least two to three weeks ahead and activate it before you leave.
The Setup That Works
Cash: Schwab. For withdrawals abroad, Schwab is the cheapest debit card in the US: no foreign fee and unlimited refunds. Bank of America customers can also use the Global ATM Alliance, but that waives only the flat fee and still charges 3 percent.
Purchases: a no-foreign-fee credit card, or Wise. Pay for hotels, meals and tours with a credit card that has no foreign transaction fee, or with a Wise card, which converts at the mid-market rate with a small visible fee and lets you hold euros, pounds or yen before you leave. Our comparison of Wise vs Schwab for ATM fees shows where each wins.
If you only have Fidelity. Use it for cash, where its refunds still beat almost any other bank, and put purchases on a no-foreign-fee card. That keeps the 1 percent to the cash you actually need. The full line-up is in our guide to the best debit cards for international travel.
Frequently Asked Questions
Does Fidelity charge a foreign transaction fee on its debit card?
Fidelity's fee disclosure for the Cash Management Account says a foreign transaction fee of 1 percent may be included in the amount charged to your account and is not waived. Some marketing pages say Fidelity charges no foreign fees, and some travellers report it not appearing on particular withdrawals, so check your statement after the first foreign transaction.
Does Schwab charge a foreign transaction fee?
No. Schwab Bank does not charge a foreign transaction fee on Investor Checking debit card purchases or ATM withdrawals abroad. The conversion uses the Visa network rate.
Do Fidelity and Schwab both refund international ATM fees?
Yes. Schwab rebates ATM operator surcharges worldwide without limit, at the end of each statement cycle. Fidelity reimburses ATM fees charged by other institutions the same day, at machines showing the Visa, Plus or Star logos. Neither refunds the cost of accepting a conversion into dollars on the machine's screen.
Which is better for travel, Fidelity or Schwab?
Schwab, because it has no foreign transaction fee. On a trip with $3,000 of foreign spending and withdrawals, Fidelity's 1 percent costs about $30 more. Fidelity is still far cheaper abroad than a typical bank debit card, and its same-day ATM refunds are more convenient.
Do I need a Schwab brokerage account to get the debit card?
Yes. Schwab Investor Checking is opened together with a linked Schwab One brokerage account. It costs nothing, has no minimum and does not need to be funded or used.
Can I use Fidelity or Schwab debit cards at any ATM abroad?
At any machine that accepts Visa or Plus, and Fidelity also lists Star. Choose machines attached to banks where possible, decline any offer to convert into dollars, and expect the operator's fee to appear first and be refunded afterwards.
The Bottom Line
Fidelity and Schwab both solve the biggest cost of getting cash abroad, the foreign ATM's own fee. Schwab goes one step further by charging no foreign transaction fee at all, which on a typical trip saves around 1 percent of everything you spend and withdraw.
If you are opening an account for travel, open Schwab. If you already bank with Fidelity, use its card for cash and put purchases on a card with no foreign fee. Either way, always choose the local currency on the screen.
Our travel card comparison lists the credit and debit cards with no foreign transaction fees.
Hero photo: two debit cards, by VulcanSphere, CC BY 4.0, via Wikimedia Commons.