03.18.26 Where NOT To Invest - NEVER EVER / The Grandparent Trap - The Clark Howard Podcast Recap

Podcast: The Clark Howard Podcast

Published: 2026-03-18

Duration: 25 min

What Happened

Clark Howard strongly advises against investing with "giant monster mega banks," expressing disdain for their practices of offering negligible interest rates on savings accounts and charging exorbitant investment fees. Howard criticizes these banks for not acting as fiduciaries, meaning they are not required to prioritize clients' best interests, which often leads to clients being overcharged.

He suggests that instead of using banks for investments, individuals should consider discount brokers or fee-only fiduciary financial advisors. These alternatives typically offer significantly lower fees, which can substantially impact the net returns on investments over time.

Howard also answers listener questions regarding cash management accounts from Fidelity, Vanguard, and Schwab. He explains that while Vanguard's Cash Plus account may offer higher interest over time, it is less flexible compared to Fidelity and Schwab's offerings. Each option has its own set of features and benefits, and individuals should choose based on their specific needs.

In response to a listener question about whether to open a Roth IRA or a brokerage account, Howard emphasizes the advantages of a Roth IRA, especially for young investors. He highlights that the Roth IRA allows for tax-free growth and withdrawal, making it an ideal tool for retirement savings.

Clark Howard discusses the financial responsibilities of grandparents, noting that 99% give money to their grandchildren, averaging nearly $4,000 annually. He warns that while this generosity can be beneficial for grandchildren, it might lead to financial strain for grandparents if not managed carefully.

Howard shares a cautionary tale about rental car bookings, reminding listeners to document the condition of rental cars thoroughly. This practice protects against unwarranted damage claims, a problem that occurs with rental companies, including those under the Hertz umbrella.

Key Insights

• Clark Howard highlights the pitfalls of investing with large banks, pointing out their high fees and lack of fiduciary responsibility. He advocates for using discount brokers or fiduciary advisors as more cost-effective and client-focused alternatives.
• Vanguard's Cash Plus account is noted for potentially higher interest rates but lacks the comprehensive features of Fidelity and Schwab's cash management accounts. Howard advises individuals to choose based on their specific banking needs.
• A listener's question about Roth IRAs versus brokerage accounts prompts Howard to recommend Roth IRAs for young investors. The tax-free growth and withdrawal benefits make Roth IRAs an excellent choice for building retirement savings.
• Howard discusses the financial impact of grandparents' generosity, noting that nearly all grandparents give money to their grandchildren. This support averages almost $4,000 annually, which can strain finances if not managed properly.