Author Topic: Investment Delay: Is this totally normal?  (Read 5258 times)

trailrated

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Investment Delay: Is this totally normal?
« on: December 29, 2014, 03:46:41 PM »
Stupid question, so I got a work bonus check which was a live check rather than direct deposit. There was a 5 business day hold put on the check from my bank. After that went through I transferred the funds to my vanguard account where there is now a 7 business day hold. Is that totally normal?

In the end it is not that big of a deal but it is so annoying to look at account balances and know where I want my funds to be but I have to sit back for two and a half weeks to make the transaction. I am impatient.

SpicyMcHaggus

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Re: Investment Delay: Is this totally normal?
« Reply #1 on: December 29, 2014, 04:10:26 PM »
Normal? yes.
You can shop around for institutions that have better turnaround times.

KevDolan

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Re: Investment Delay: Is this totally normal?
« Reply #2 on: December 29, 2014, 06:38:20 PM »
That has happened to me as well. I just transferred a bunch of money to Vanguard from another investment company. It does seem ridiculous for it to take that long in this electronic age.

sheepstache

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Re: Investment Delay: Is this totally normal?
« Reply #3 on: December 29, 2014, 07:31:18 PM »
I bank with Chase and they usually make some amount of checks available immediately. I'm surprised by the Vanguard number. I seem to recall that there's a hold on money deposited into my sweep account for a long time but, confusingly, that I can spend it before the hold is up. I googled around and this explains it a bit better:
http://www.mymoneyblog.com/vanguard-brokerage-services-funds-availability-policy-for-trading.html

trailrated

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Re: Investment Delay: Is this totally normal?
« Reply #4 on: December 30, 2014, 08:57:49 AM »
I bank with Chase and they usually make some amount of checks available immediately. I'm surprised by the Vanguard number. I seem to recall that there's a hold on money deposited into my sweep account for a long time but, confusingly, that I can spend it before the hold is up. I googled around and this explains it a bit better:
http://www.mymoneyblog.com/vanguard-brokerage-services-funds-availability-policy-for-trading.html

Great info, thank you for the heads up. And in response to the other posters the deposit was made in a branch with a teller.

SpicyMcHaggus

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Re: Investment Delay: Is this totally normal?
« Reply #5 on: December 30, 2014, 11:05:36 AM »
To the OP, a check hold period is normal if you deposited the check using an ATM or a phone application. However, it's not normal if you deposited the check at a teller.

Always deposit paper checks at a teller.

Tellers have discretion about whether to place a hold but in my experience, I have never had a check held when I deposited it at a teller.

I am a customer of most banks in Canada and USA but I have not dealt with very many personal paper checks in the USA.

Since moving to the US, I have deposited three paper checks in my Bank of America account: one for $9000, one for $6000, and one for $12,000. In each case, the money was immediately available in my account (and I transferred it to investments immediately).

My bank places a hold on all but $100 of a check. Typically for 2 business days. Even when presented to a teller.
Why?
Because checks bounce. Depositing it on your phone or to a branch makes no difference; the check may still be drawn on an account with insufficient funds.

Dicey

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Re: Investment Delay: Is this totally normal?
« Reply #6 on: December 30, 2014, 11:42:05 AM »
While I would not call Cathy a liar (Huh?), I think her experience is not necessarily typical...

I'd contact Vanguard directly. It could have something to do with your balance. If you have loads more in your account than the amount of the check, they may waive the waiting period.

OTOH, a few days in the grand scheme of things is no big deal. The delay could work for you or against you and will even out over long periods of time.

James

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Re: Investment Delay: Is this totally normal?
« Reply #7 on: December 30, 2014, 12:09:57 PM »
I agree, holds are a pain. Maybe next time see if you can deposit the work check directly to Vanguard? The bank hold can possibly be negotiated down. And there is probably an electronic transfer to get the money from your bank to Vanguard faster, something to look into.

trailrated

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Re: Investment Delay: Is this totally normal?
« Reply #8 on: December 30, 2014, 12:29:54 PM »
I agree, holds are a pain. Maybe next time see if you can deposit the work check directly to Vanguard? The bank hold can possibly be negotiated down. And there is probably an electronic transfer to get the money from your bank to Vanguard faster, something to look into.

Best. Idea. Ever. Thank you, I am going to start doing that. I didn't even realize it was an option.

BlueHouse

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Re: Investment Delay: Is this totally normal?
« Reply #9 on: December 30, 2014, 01:43:40 PM »
I agree with above advice -- deposit it directly with VG.  My checks lately haven't had holds put on them, but I think that may be because most of my checks are written on banks in the same state.   A few years ago I did business with a company based on the opposite coast and it took about a week to clear each check. 
I give VG direct access to my checking account, so I can transfer money into VG quickly.  I'm not sure why it's different from a wire transfer, but that's not the option I choose.  Anyway, I place an order with Vanguard, and within 3 days, it's debited from my bank account -- but the transaction hits Vanguard immediately -- so in effect, they're floating the cash for me.

SpicyMcHaggus

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Re: Investment Delay: Is this totally normal?
« Reply #10 on: December 30, 2014, 02:41:18 PM »
My bank doesn't evaluate me as a risk. I have an account there. I don't write checks. Just cashing rent/income checks.

Just because your bank doesn't hold the check until it clears doesn't mean it's good. If that check bounces later, they will deduct it from your account just the same as if you never presented it. This can cause some people overdrafts, etc. To avoid angry customers, they don't let you spend money you don't have.

I dont know what the heck you're talking about when you say that you cash checks with instant clearance because the bank says you are a lower risk. The risk isn't you. It's the party issuing the check. Evaluating you has nothing to do with it.

dandarc

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Re: Investment Delay: Is this totally normal?
« Reply #11 on: December 30, 2014, 03:34:19 PM »
I dont know what the heck you're talking about when you say that you cash checks with instant clearance because the bank says you are a lower risk. The risk isn't you. It's the party issuing the check. Evaluating you has nothing to do with it.

Actually, the risk for the bank has a lot to do with the person presenting the check.

If the check doesn't clear and the bank has to deduct the amount from your account, if this causes you to have a negative balance, the bank has basically extended credit to you. The question is then whether you can be trusted to pay that credit back in an immediate fashion. If you can, there's no risk to the bank to allow you to access check money immediately, even if the check might bounce.

So if the bank concludes you are a low risk, your checks will not be held. Conversely, if the bank is holding your checks, it thinks you are a higher risk.
Yep - if I've got 10K in my account and deposit a check for $500, bank is very unlikely to have a problem.  Reverse the numbers and things could get ugly if the check doesn't clear.

FWIW my bank seems to put holds on checks for over $5K - and they release that $5K immediately.