mini-Rant: 3+ day banking processing times

[nereo]

Rant:  Recently had to transfer money and I'm annoyed by the holding periods put on my money by one of the major brokerages of 3 business days. Of course the money leaves my account within seconds - it just takes that long to re-appear in the new account, during which time that money is just gone... floating in the ether somewhere, neither here nor not her.

What makes it particularly annoying is that this a transfer from within the same brokerage. When I asked about it the response has always been they needed to verify the funds - well how long can it possibly take to verify that within-house? You've held my money for years.  Now I'm asking you to move it into a different bucket. My guess is they make a non-trivial amount of profit on these collective 'holds' as they do not pay any interest or dividends during this period.

/rant.

[RetiredAt63]

Rant:  Recently had to transfer money and I'm annoyed by the holding periods put on my money by one of the major brokerages of 3 business days. Of course the money leaves my account within seconds - it just takes that long to re-appear in the new account, during which time that money is just gone... floating in the ether somewhere, neither here nor not her.

What makes it particularly annoying is that this a transfer from within the same brokerage. When I asked about it the response has always been they needed to verify the funds - well how long can it possibly take to verify that within-house? You've held my money for years.  Now I'm asking you to move it into a different bucket. My guess is they make a non-trivial amount of profit on these collective 'holds' as they do not pay any interest or dividends during this period.

/rant.

3 days is good, modern tech.  Year ago I transferred funds for an RRSP and it took a good 10 days.

Related rant - why does it take 3 days for an online payment to go from one bank to another bank?  Same deal, money gone instantly, shows up 3 days later as a payment.  It's from a chequing account so I am not losing any interest, but still . . . .

[Papa bear]

So, I thought back in 2002 or so, they were moving to "instant" clearing of checks and funds.  Because 3 days has been standard for well before that. So much for "modern" tech.


Sent from my iPhone using Tapatalk

[inline five]

I can't follow exactly but Bank of America and Merrill Edge transfers are instant.

[Paul der Krake]

My previous HSA custodian quoted me "weeks" and having to learn how a fax machine works in order to rollover to the new custodian.

[Fomerly known as something]

I work in the industry from a fraud/crime aspect.  My guess it will always be at least 3 days at least for larger amounts.  In theory, this allows for the customer to notice something funky and for the bank/law enforcement to intervene to freeze the funds if necessary.  There are regulations in regards to this.

[nereo]

I can't follow exactly but Bank of America and Merrill Edge transfers are instant.

Not for this - ML was exactly who I was dealing with

I work in the industry from a fraud/crime aspect.  My guess it will always be at least 3 days at least for larger amounts.  In theory, this allows for the customer to notice something funky and for the bank/law enforcement to intervene to freeze the funds if necessary.  There are regulations in regards to this.

This could be plausible. Though with the various ‘client verification’ and multi-stage authentication in place, I’m not sure the extra hold is justified, particularly when money isn’t being removed (cashed out), its just being converted.

[mm1970]

Rant:  Recently had to transfer money and I'm annoyed by the holding periods put on my money by one of the major brokerages of 3 business days. Of course the money leaves my account within seconds - it just takes that long to re-appear in the new account, during which time that money is just gone... floating in the ether somewhere, neither here nor not her.

What makes it particularly annoying is that this a transfer from within the same brokerage. When I asked about it the response has always been they needed to verify the funds - well how long can it possibly take to verify that within-house? You've held my money for years.  Now I'm asking you to move it into a different bucket. My guess is they make a non-trivial amount of profit on these collective 'holds' as they do not pay any interest or dividends during this period.

/rant.

They get interest for those 3 days (the new bank)
To prevent fraud

[BTDretire]

I recently watched a show on CNBC about bitcoin. The related a money transfer in Southern Africa,
you go down to the bus depot and find a bus going to the city you are transferring to, and ask the driver if he will take the money. The fee was 10% and you just crossed your fingers that the driver didn't steal the money.
Depending on the distance it could be a same day transfer.
  The point of the story was Bitcoin was being hyped as the solution to money transfer and other lack of banking problems. It was compared to some countries went from no phones to smart phones, skipping the land line.
 The countries could go from no local banking straight to accessible bitcoin as their money system.

[jim555]

Some banks and brokers have 3-4 day ACH times, but if you initiate it from the outside it goes right away.

[Jec418]

It’s certainly not a technological problem. My bank in Singapore transfers funds instantly to any account at any major bank here. It never takes more than about 2 minutes for the funds to show up and be usable, save that my broker’s account takes an hour or two for funds to be allocated to my trading account and available for use . But, when time comes to send anything back to the US (eg to pay Uncle Sam), I need to prepare at least 3 business days in advance - this has burned me on more than one occasion. I think it’s for AML and fraud protection.

[GrumpyPenguin]

I send/receive money with friends and family with Zelle all the time.  It's a payment service actually owned by many of the largest banks and many of them have integrated their apps with the transfer service.  After the initial set up, most money is transferred and usable within a few minutes.  I wouldn't use it with strangers, and there's little recourse to get money back, but for friends and family it has been great.

[intellectsucks]

Was it an investment or cash?  If the investment had to be liquidated prior to transferring then the three business days was the required time to allow for proper settlement of the trade. I can't remember if federal law requires the three days or if it allows a maximum of three days. I'm inclined to believe it's the first since I have literally never seen an investment trade settle in less than three days.

[maustache]

I've transferred money to my Vanguard money market account and it shows up immediately. This is using the Vanguard site. In fact, I usually get a day or two of "float" where I'm earning interest in both my checking account (not much) and Vanguard.

[inline five]

I can't follow exactly but Bank of America and Merrill Edge transfers are instant.

Not for this - ML was exactly who I was dealing with

I work in the industry from a fraud/crime aspect.  My guess it will always be at least 3 days at least for larger amounts.  In theory, this allows for the customer to notice something funky and for the bank/law enforcement to intervene to freeze the funds if necessary.  There are regulations in regards to this.

This could be plausible. Though with the various ‘client verification’ and multi-stage authentication in place, I’m not sure the extra hold is justified, particularly when money isn’t being removed (cashed out), its just being converted.

Merrill Lynch or Merrill Edge? I have done it numerous times, I'm telling you it's instant on Merrill Edge. If you are worried just call them, they'll do it over the phone.

[inline five]

I recently watched a show on CNBC about bitcoin. The related a money transfer in Southern Africa,
you go down to the bus depot and find a bus going to the city you are transferring to, and ask the driver if he will take the money. The fee was 10% and you just crossed your fingers that the driver didn't steal the money.
Depending on the distance it could be a same day transfer.
  The point of the story was Bitcoin was being hyped as the solution to money transfer and other lack of banking problems. It was compared to some countries went from no phones to smart phones, skipping the land line.
 The countries could go from no local banking straight to accessible bitcoin as their money system.

Bitcoin takes hours but one the large banks have signed up with is Ether. Digital currency won't be a thing IMO but the tech behind it is promising which is why they are working with Ether.

[jim555]

Was it an investment or cash?  If the investment had to be liquidated prior to transferring then the three business days was the required time to allow for proper settlement of the trade. I can't remember if federal law requires the three days or if it allows a maximum of three days. I'm inclined to believe it's the first since I have literally never seen an investment trade settle in less than three days.

Trades now settle T+2.
http://www.finra.org/investors/highlights/t-plus-two-is-here

[Acastus]

I rolled over my HSA, so I feel you. I started the process July 26. Old HSA transfer process took 1 month. Money left the account August 27 and stated a 3 day process to send it. As of today, the money has still not landed in the new HSA. I think they cut a check and mailed it so they could collect interest for another week.

[neo von retorch]

This definitely annoys me, but it varies greatly by financial institution. My state credit union does almost everything "instantly." For example, if I initiate a transfer from my account to another member account, it appears there instantly, and can immediately be withdrawn. I can even deposit a check from my mobile app, and immediately use the money. (Obviously any sort of abuse would result in consequences including and not limited to revocation of the mobile check deposit privilege!)

I also use Marcus (previously Goldman Sachs online savings, previously GE Capital online savings...) - they aren't quite as fast, but if you initiate a transfer, it pretty much happens the very next (business) day, though it might not be available to actually move again for ~5 business days.

[renata ricotta]

I recently opened a high yield savings account with Synchrony and the single most annoying thing about it is 3-4 business days for a transfer from my checking account.  I swear they are sending it in quarters via mule buggy.  I'm sure there's reasons, but I just find it irritating to always be doing mental math when I look at my mint accounts to figure out my "real" balances because I often have multiple transfers that take time.  See also: my credit card shows the payment made so it says I have a $0 balance, but it hasn't registered in my checking account yet; I know my bank has sent my rent check, but my landlord is just taking his sweet time cashing it; I have a Vanguard order that checking has seen but my brokerage account hasn't yet; blah blah blah.  Makes me feel like I need an old fashioned check register to know how much money I actually have at any given time.

[neo von retorch]

I recently opened a high yield savings account with Synchrony and the single most annoying thing about it is 3-4 business days for a transfer from my checking account.

I opened an online Savings Account with Synchrony so I could compare it to Marcus (Goldman Sachs Bank), and it was terrible. So my money is still at Marcus. Much better!