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30 Day Hold on TFSA Funds - Isn't this an absurdly long hold period?
August 19, 2022
4:57 pm
Loonie
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Why, then are these transfers typically done by an FI sending a cheque to another FI? I agree it's not terribly secure or reliable. Why not use a better route?

Also, if there were any concern that a draft might be fake, all they have to do is phone the issuer - at least in theory. I once got a bank draft at HSBC after closing an account which I then walked across the street to TD where I had a longstanding account. The guy at TD looked at it like it came from Mars and was reluctant to even deposit it. I told him to phone across the street and gave him the name of the person I'd just dealt with but he wouldn't. Eventually, after consulting with a manager, he decided to deposit it. Lord knows how long they held it; i don't remember.

By contrast, when I bought a new car a few years ago, the dealer specified that only a bank draft would do. I presented the draft and drove off with my new car, which was of similar value to the HSBC draft presented at TD.

August 19, 2022
5:17 pm
Nehpets
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Loonie said ...The guy at TD looked at it like it came from Mars and was reluctant to even deposit it......
.... I presented the draft and drove off with my new car, which was of similar value to the HSBC draft presented at TD.  

Moral of the story:
Sounds like we would do better to be banking at the car dealer, Loonie!!..sf-laugh

Stephen

August 19, 2022
7:27 pm
Canuck
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Bill said
I find registered plans, being more unwieldy than regular accounts, are best for long-term plan money. My "things change", might need it to pay bills, etc money is much easier to deploy if it's in non-registered accounts.  

It is my long-term plans that have changed; I want to invest a portion of my TFSA funds in the stock market. I had previously been weary of investing in the stock market, but after learning more, I've realized that I have a long enough time horizon not too worry too much about market downturns.

August 19, 2022
7:30 pm
Canuck
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Loonie said
Why, then are these transfers typically done by an FI sending a cheque to another FI? I agree it's not terribly secure or reliable. Why not use a better route?

Also, if there were any concern that a draft might be fake, all they have to do is phone the issuer - at least in theory. I once got a bank draft at HSBC after closing an account which I then walked across the street to TD where I had a longstanding account. The guy at TD looked at it like it came from Mars and was reluctant to even deposit it. I told him to phone across the street and gave him the name of the person I'd just dealt with but he wouldn't. Eventually, after consulting with a manager, he decided to deposit it. Lord knows how long they held it; i don't remember.

By contrast, when I bought a new car a few years ago, the dealer specified that only a bank draft would do. I presented the draft and drove off with my new car, which was of similar value to the HSBC draft presented at TD.  

There has to be a better way to do registered transfers generally. The government and the banks should utilize general APIs over a common protocol to validate identity, the integrity of the funds, and the "registration" of the transactions. It seems like the current setup is one of unsophisticated and misaligned processes and systems.

That being said, I still maintain that a 30 day hold is kind of out there. How come other banks don't have a 30 day hold? What is so different about Motive that they need to have such a long hold period?

August 19, 2022
7:31 pm
Canuck
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FYI, I confirmed again today that this is a general policy for registered transfers; it does not have anything to do with any special set of circumstances.

August 19, 2022
8:49 pm
Norman1
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Loonie said
Why, then are these transfers typically done by an FI sending a cheque to another FI? I agree it's not terribly secure or reliable. Why not use a better route?

There isn't a better route. There is no universal way to attach the TFSA direct transfer paperwork to the automated direct deposit or wire transfer.

With a paper cheque, one can just put the paperwork in the same envelope as the cheque before mailing them together.

The upcoming ISO 20022 data-rich payments part of the Payments Canada modernization project will try to address the limitation in the Canadian automated funds transfer and wire transfer systems.

August 19, 2022
9:13 pm
Canuck
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Norman1 said
The upcoming ISO 20022 data-rich payments part of the Payments Canada modernization project will try to address the limitation in the Canadian automated funds transfer and wire transfer systems.  

Will this have anything to do with digital ID?

August 19, 2022
9:58 pm
Norman1
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There no enhanced consumer digital ID planned with the Payments Canada data-rich payments.

Consumer digital ID's are actually available through SecureKey's Verified.Me service. Just not a lot of acceptance of them so far.

August 20, 2022
2:13 pm
Jimmy
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Canuck said

That isn't it. As far as I understand it, the funds cannot even be moved to a Motive savings account. They will release the hold if you buy a GIC.

As to the "why" question:

  • Because it was a lengthy process to set up my account with them, due to delays (they were busy) and due to the fact that they have an archaic system with all kinds of technical issues. And of course, the more time that passes, the more plans tend to change... so plans changed.
  • Because I might need some of the funds due to personal circumstances which have arisen. People should be able to make withdrawls from the TFSA in order to deal with emergencies, pay unforseen bills, etc. That's why a 30 day hold period is so excessive.
  • Because I might want to invest a portion of the funds in ways that are not offered by Motive Financial, which should be my prerogative.

  

I've done a few TFSA transfers, EQ Bank to Hubert being the most recent (took about 2 weeks). I'm surprised that you can't even transfer to Motive non registered savings account. When I bought my house years ago I transferred from ING TFSA to my ING non-registered account and then transferred to my main bank to write the cheque for the house.

August 21, 2022
11:15 am
RetirEd
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Norman1: The bank draft (or equivalent) is recorded at the issuing institution and the funds secured. It is then verified by phone, fax or E-mail at the time of cashing. That's why it can be processed with confidence. Such has been the case every time I've used one, including this month.

I can't say for absolute certainty that such instruments can't be deposited at an ATM or via image, though; I would not expect so. Anyone know more?
RetirEd

RetirEd

August 21, 2022
11:55 am
Norman1
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RetirEd said
Norman1: The bank draft (or equivalent) is recorded at the issuing institution and the funds secured. It is then verified by phone, fax or E-mail at the time of cashing. That's why it can be processed with confidence. Such has been the case every time I've used one, including this month.

I can't say for absolute certainty that such instruments can't be deposited at an ATM or via image, though; I would not expect so. Anyone know more?

That's not the case.

Bank drafts and certified cheques are cleared exactly the same way as regular cheques through the Payments Canada ACSS system. They can be deposited by ATM or phone deposits just like a regular cheque. In fact, they look like a regular cheque.

There's no phone, fax, or e-mail clearing of them.

As far back as twenty years ago, the crooks were able to counterfeit them. There was a warning put out on a local Usenet for sale group. A scammer was paying for items using counterfeit Bank of Montreal money orders.

One victim took the returned money order to a Bank of Montreal branch. The fake was so good the teller thought a mistake was made by the bank's clearing. The fake had all the security features.

It wasn't until the teller keyed in the serial number of the fake and saw that the details didn't match that she realized it really was a fake.

If the scammer can counterfeit a bank draft, then the person can easily counterfeit an accompanying business card with a different phone number for someone unwary to contact for "verification".

August 21, 2022
3:52 pm
Canuck
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Norman1 said
That's not the case.

Bank drafts and certified cheques are cleared exactly the same way as regular cheques through the Payments Canada ACSS system. They can be deposited by ATM or phone deposits just like a regular cheque. In fact, they look like a regular cheque.

There's no phone, fax, or e-mail clearing of them.

As far back as twenty years ago, the crooks were able to counterfeit them. There was a warning put out on a local Usenet for sale group. A scammer was paying for items using counterfeit Bank of Montreal money orders.

One victim took the returned money order to a Bank of Montreal branch. The fake was so good the teller thought a mistake was made by the bank's clearing. The fake had all the security features.

It wasn't until the teller keyed in the serial number of the fake and saw that the details didn't match that she realized it really was a fake.

If the scammer can counterfeit a bank draft, then the person can easily counterfeit an accompanying business card with a different phone number for someone unwary to contact for "verification".  

Why can't the receiving bank just pick up the phone and call the sending back to verify the integrity of the funds?

In this case, Motive could just call Tangerine.

I'm also still not sure why, of all the many banks that I've dealt with, only Motive has this 30 calendar day hold period on registered transfers.

August 22, 2022
8:25 am
Norman1
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There's no telephone certification of bank drafts in Canada. So, any call the receiving bank makes to the issuing bank is meaningless. Consequently, it would be a waste of staff time for Motive to try.

Why would any bank be foolish enough to certify a bank draft over the phone unseen? That the cheque number, amount, payee, and account numbers match only means someone saw the issued draft. It doesn't mean the person actually has the issued draft, instead of a copy of it.

August 22, 2022
11:32 am
Canuck
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Norman1 said
There's no telephone certification of bank drafts in Canada. So, any call the receiving bank makes to the issuing bank is meaningless. Consequently, it would be a waste of staff time for Motive to try.

Why would any bank be foolish enough to certify a bank draft over the phone unseen? That the cheque number, amount, payee, and account numbers match only means someone saw the issued draft. It doesn't mean the person actually has the issued draft, instead of a copy of it.  

Okay, fair enough. But what of every other bank that doesn't have a 30 day hold period on registered transfers? Are they all foolish, and Motive is the one bank that has it all together? Because my experience with Motive thus far, in pretty much every single way, is the opposite of them having it all together.

I can't help but think of this extraordinarily long hold period as another example of how annoying it has been to deal with this bank generally (other than the customer service, which has been decent).

August 22, 2022
4:01 pm
Norman1
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The 30-day hold on the direct-transfer TFSA funds likely has nothing to do with potential problems with the bank drafts involved in the transfers.

More likely there is some limitation in how their banking system handles registered accounts.

August 22, 2022
4:22 pm
Canuck
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Norman1 said
The 30-day hold on the direct-transfer TFSA funds likely has nothing to do with potential problems with the bank drafts involved in the transfers.

More likely there is some limitation in how their banking system handles registered accounts.  

You could be right. That would be in line with everything else that I've experienced with Motive's decrepit, archaic systems.

But I'm pretty sure that they said that the hold is only 30 calendar days if the registered transfer is done through a bank draft (as opposed to electronically). But I didn't double check that the last time I called. Although, even in that case, it still might have to do with limitations of their crappy systems.

August 22, 2022
6:05 pm
Jimmy
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Norman1 said

RetirEd said
Norman1: The bank draft (or equivalent) is recorded at the issuing institution and the funds secured. It is then verified by phone, fax or E-mail at the time of cashing. That's why it can be processed with confidence. Such has been the case every time I've used one, including this month.

I can't say for absolute certainty that such instruments can't be deposited at an ATM or via image, though; I would not expect so. Anyone know more?

That's not the case.

Bank drafts and certified cheques are cleared exactly the same way as regular cheques through the Payments Canada ACSS system. They can be deposited by ATM or phone deposits just like a regular cheque. In fact, they look like a regular cheque.

There's no phone, fax, or e-mail clearing of them.

As far back as twenty years ago, the crooks were able to counterfeit them. There was a warning put out on a local Usenet for sale group. A scammer was paying for items using counterfeit Bank of Montreal money orders.

One victim took the returned money order to a Bank of Montreal branch. The fake was so good the teller thought a mistake was made by the bank's clearing. The fake had all the security features.

It wasn't until the teller keyed in the serial number of the fake and saw that the details didn't match that she realized it really was a fake.

If the scammer can counterfeit a bank draft, then the person can easily counterfeit an accompanying business card with a different phone number for someone unwary to contact for "verification".  

Norm, I might be misunderstanding here, but you mention that bank drafts and certified cheques can be deposited by ATM or phone deposits. I deposited bank drafts and certified cheques at ATM no problem, but when I tried to deposit a certified cheque by image on EQ Bank app it was rejected. It went through ok at the time, but when I logged into my account the next day or two it showed rejected. I called EQ and the representative said certified cheques and bank drafts cannot be deposited through their app. Only regular cheques. I had to deposit the certified cheque at my main bank and then transfer to EQ.

August 22, 2022
6:41 pm
RetirEd
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An interesting range of experiences. Every certified item I've ever deposited was verified while I waited at the counter - and in my case always by telephone. That covers about fifteen transactions since 2002, two this year... one for about $70K, the other for about $4.5K. Good to learn of other histories.

But a certified cheque takes its cash at the time of issuing, so a receiver calling in should be able to get a solid confirmation. I will note that at my most recent use of a certified cheque, the issuing institution said they treated certified cheques, bank drafts and "official letters" exactly the same, which surprised me at the time.

I guess I'll keep asking questions.
RetirEd

RetirEd

August 23, 2022
5:45 am
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Canuck said

You could be right. That would be in line with everything else that I've experienced with Motive's decrepit, archaic systems.

But I'm pretty sure that they said that the hold is only 30 calendar days if the registered transfer is done through a bank draft (as opposed to electronically). But I didn't double check that the last time I called. Although, even in that case, it still might have to do with limitations of their crappy systems.  

Their core banking behind the scenes is actually the same platform as EQ Bank. What we see, MemberDirect, is indeed old and they're replacing it.

August 24, 2022
5:42 pm
Norman1
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RetirEd said
An interesting range of experiences. Every certified item I've ever deposited was verified while I waited at the counter - and in my case always by telephone. That covers about fifteen transactions since 2002, two this year... one for about $70K, the other for about $4.5K. Good to learn of other histories.

But a certified cheque takes its cash at the time of issuing, so a receiver calling in should be able to get a solid confirmation. …

I don't know why they would be doing all that. A certified cheque, bank draft, or money order has MICR-encoded institution, transit, and account numbers, like a regular cheque. A certified cheque can just be put with the regular cheques and cleared.

The most calling can accomplish is determine if a cheque with that serial number, amount, and account number was ever certified and not cashed yet. It doesn't mean that the certified cheque is genuine. That could be a copy. The original was already deposited earlier in the day and making its way through the clearing system.

There are plenty of reports online that tellers will just accept the certified cheque or bank draft for deposit and put the usual five-day hold on the funds. No making the customer wait while calls were made.

There was some fuss a while back when I tried to move funds between banks with one of my personal cheques. The ATM correctly read the cheque's amount but rejected the deposit attempt. I went to a teller and explained what happened at the ATM. She also had some issue trying to deposit the cheque. She said she would be back shortly. She took the cheque to multiple people for examination. One person seemed to be keying something from my cheque into the system. It looked like they were trying to verify the cheque.

When she came back, I asked if there was something wrong with the cheque. She said the cheque was fine. She explained that the ATM rejected the deposit because the cheque amount was above my ATM deposit limit. System had rejected her attempt because the cheque was also above her authorized limit. She had to find a co-worker with a high enough limit to approve the cheque's deposit!

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