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Direct deposits to Neo Savings are placed on hold on arrival
April 7, 2021
8:33 am
Alexandre
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After linking Neo Savings as external account to my other banks, I made funds transfer from two different banks to Neo Savings.
In both cases, these deposits were placed on hold at Neo, upon arrival. $100 from each transfer is available immediately, the rest is not. I am assuming it could be up to 5-10 business days hold.

This is first time I have seen funds on hold that arrived by direct deposit. I am not sure if it is because these are first transfers to newly opened Savings account, or it is standard Neo policy for any direct deposit.
Transfers are not large, less than $2,000 in both cases.

I don't mind, but if someone needs instant access to transferred funds, they should consider using Interact transfer.

April 7, 2021
8:41 am
Norman1
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Wow, that is a first!

That would be a nasty surprise for someone directing their payroll or pension direct deposit to a Neo Savings account! sf-surprised

April 7, 2021
8:54 am
pooreva
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Post is confusing.
OP said: 'I made funds transfer'. Any fund transfer initiated by client will go on hold. I have not hear of any FI not having a hold (or partial hold) after fund transfer.
Then she mentioned: 'arrived by direct deposit'. This was not 'direct deposit' but regular fund transfer by client. No matter if you push or pull funds, money will be on hold.
Am I missing something or this Neo Saving is different than other FI.

April 7, 2021
9:10 am
Alexandre
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Norman1 said
Wow, that is a first!

That would be a nasty surprise for someone directing their payroll or pension direct deposit to a Neo Savings account! sf-surprised  

My thoughts exactly.

I have another transfer, initiated from LBC to Neo last evening. Funds should appear in my Neo Savings account today at the evening. I'll see if funds from that transfer also placed on hold upon arrival and will provide an update here.

April 7, 2021
9:13 am
Doug
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Norman1 said
Wow, that is a first!

That would be a nasty surprise for someone directing their payroll or pension direct deposit to a Neo Savings account! sf-surprised  

This could be, in fact, because the deposit is held with Concentra Bank, where no hold is placed, but Neo Financial places a hold or other restriction on funds on its platform.

For this reason, I would now no longer recommend adding Concentra Bank's Neo Savings Account to the high interest savings account chart. It's just a very sub-optimal account.

Unless pooreva's analysis is correct, in which case, Alexandre, can you clarify, exactly, the steps you took to have the direct deposit effected?

Cheers,
Doug

April 7, 2021
9:34 am
Londonguy
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pooreva said
Post is confusing.
OP said: 'I made funds transfer'. Any fund transfer initiated by client will go on hold. I have not hear of any FI not having a hold (or partial hold) after fund transfer.
Then she mentioned: 'arrived by direct deposit'. This was not 'direct deposit' but regular fund transfer by client. No matter if you push or pull funds, money will be on hold.
Am I missing something or this Neo Saving is different than other FI.  

With any FI, funds pulled from Bank A for deposit to Bank B are subject to hold at Bank B until they clear because the transfer could fail, typically NSF.

In contrast, funds pushed out of Bank A into Bank B are equivalent to a cash transfer. A completed push can't bounce, it can only be rejected by the receiving bank based upon internal policy (e.g. EQ has maximum account size that can't be exceeded, so they might return a transfer). But there is no hold on the push itself because there doesn't need to be.

I suspect that Doug is correct that if one sees a hold on pushed funds at Neo, it is related to the Neo/Concentra relationship. And if such a hold persists for more than a few hours until the Neo platform releases the funds, I'd be rethinking the decision to bank with them

April 7, 2021
10:39 am
RetirEd
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This still drives me nuts. Alexandre said:

I don't mind, but if someone needs instant access to transferred funds, they should consider using Interact transfer.

The payment and transfer service is INTERAC. There is no terminal "t" - that would prevent them from getting a trademark, as it's a normal English word.

What can I say. I'm obsessive. It's a valuable personality trait.
-RetirEd

April 7, 2021
5:33 pm
Alexandre
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Another funds transfer I pushed to Neo from LBC arrived to Neo Savings account. That one was for over $20,000 transferred to Neo Savings from LBC Checking by initiating push to Neo Savings.

Hopefully I cleared it now.

So, now what matters. That transfer also went on hold on arrival, with only $100 instantly available.
As I still haven't had funds released from previous pushes to Neo Financial, I am assuming they are under Neo hold policy of 5 or more business days.

Interesting factoid: every transfer sent from other banks to Neo Savings is deposited at Neo next day at 7:48 PM EST. Every one of them. Good to know when money arrives.

Not sure why some people are so upset with this Neo policy. Funds are shown in account, they collect interest (I presume).
If someone needs instant access to funds they can use Interac. I used Interac to push few thousand dollars to Neo Savings by now, works like it should.

PS. I will wait till holds clear and then will push few more dollars to Neo Savings. Perhaps, if account is not very new and/or with sufficient amount of money, that hold policy is lifted. Will see.

April 7, 2021
10:07 pm
smayer97
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Well all this is NOT unique to Neo. There are other FIs that also have holds on deposits no matter if they are pulled or pushed in.

Don't quote me on this (my notes may not be completely accurate) but I believe Canadian Tire, DUCA and ICICI bank are examples.

April 8, 2021
8:43 am
Alexandre
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smayer97 said
Well all this is NOT unique to Neo. There are other FIs that also have holds on deposits no matter if they are pulled or pushed in.

Don't quote me on this (my notes may not be completely accurate) but I believe Canadian Tire, DUCA and ICICI bank are examples.  

That's why I said "This is first time I have seen funds on hold that arrived by direct deposit." Speaking from personal experience only.
Looks like not only I was surprised by that, judging from the conversation.

Thanks for your input. It appears now, this Neo policy may be uncommon, but not unusual.

April 8, 2021
9:22 pm
Norman1
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I highly doubt that Canadian Tire Bank and ICICI Bank have holds on electronic direct deposits.

That makes no sense with the finality of direct deposits under Payments Canada clearing rules. That is also contrary to multiple statements from the Canadian Bankers Association about direct deposits. For example, from Opening a bank account:

Direct deposit

Having funds deposited directly to your account is the easiest way to guarantee immediate access on the date of payment without concerns of late, lost or stolen cheques, or holds on funds.

The holds on direct deposits into a Neo Savings account are unusual. The holds may not be policy. Instead, it may be a bug in their system that doesn't recognize certain kinds of direct deposits as direct deposits.

April 10, 2021
6:08 pm
Loonie
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Neo Financial is not a bank. It's a savings account. It's also a very peculiar item. It appears to have its own laws. I would not do business with them until they clean up their act.

April 10, 2021
6:20 pm
LK
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Loonie said
Neo Financial is not a bank. It's a savings account. It's also a very peculiar item. It appears to have its own laws. I would not do business with them until they clean up their act.  

Neo is a tech company providing the platform for online transactions between the customer and Concentra Bank.

Loonie: I disagree with Neo 'having its own laws' -- Neo and Concentra Bank seem to have a contractual relationship. My view (which I think you will agree with) is that there is sufficient obfuscation in relation to the legal niceties, as between Neo and Concentra Bank, so as to cause confusion with potential customers.

Unless anyone wants to bank with Concentra Bank, using Neo Financial Technologies, Inc., as a tech platform / go-between for your online services with Concentra Bank, also relying on Concentra Bank's status with the CDIC, then do not sign up. There is no "Neo" -- whether as a bank, a CU, an FI, an independently insured CDIC entity or merged CDIC entity (combined with Concentra). If you sign up with "Neo", you are entering into a contract with Concentra as the Bank, and Neo as the tech provider. Buyer beware. (I feel like I'm in the Matrix ... ). sf-wink

April 10, 2021
8:00 pm
Loonie
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It may be a tech co., but it is also the name of the account.
I would say it has its own laws because it doesn't abide by the law that affects all banks, namely that direct deposits cannot be put on hold. So, the question arises, in what sense is it really just a contractual arm for Concentra? As a tech co., it is doing a poor job for Concentra, either because it doesn't understand the banking world or because it thinks those rules don't apply to it because it's not a bank (i.e. has its own rules). In either case, competence seems in question.

April 10, 2021
8:29 pm
LK
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Loonie said
It may be a tech co., but it is also the name of the account.
I would say it has its own laws because it doesn't abide by the law that affects all banks, namely that direct deposits cannot be put on hold. So, the question arises, in what sense is it really just a contractual arm for Concentra? As a tech co., it is doing a poor job for Concentra, either because it doesn't understand the banking world or because it thinks those rules don't apply to it because it's not a bank (i.e. has its own rules). In either case, competence seems in question.  

Here is what Neo's contact says re direct deposits and holds. I kindly defer to the analyses of others re such. https://www.neofinancial.com/savings-agreement

Electronic Transfer - Electronic transfer requests may be made at any time after account opening through the Neo Platform and by other methods made possible by us from time to time. It typically takes 1-2 Business Days for funds to arrive in your Account after you make the electronic transfer request. Funds transfer arrival dates are not promised or guaranteed. Your money may be subject to a hold period after it has arrived in your Account. Please see “Holds on the money in your Account” in section B-11 below for further information. You are responsible for ensuring that there are enough funds in your external account required to cover any electronic transfers you may send. You will still be responsible to pay the fees outlined in the Deposit Disclosure for any transfer that is not processed due to insufficient funds. You will also be responsible for any fees that may be charged by the external account. In cases where electronic transfers cannot be processed with an external account, the transaction request will be reversed.

INTERAC® e-Transfer - You may receive money for deposit into your Account using the INTERAC® e-Transfer services from any person who has a bank account at a Canadian financial institution. When you correctly answer the security question that they provide to you via email link or mobile phone number, the funds will be transferred directly to your Account. You must keep the answer to the security question confidential and use it only when you claim your INTERAC® e-Transfer . In the event that you have the Autodeposit feature enabled through INTERAC®, funds will be automatically deposited in your account without the need for a security question.

Remote Deposit Service - We may, through the Neo Platform, offer Remote Deposit Service for deposit of eligible paper cheques or bank drafts to your Account. You must endorse the cheque or bank draft before you take the picture and deposit it. You must take a picture of the front and back of the cheque or bank draft with your mobile device and transmit it to us. When you capture a digital image of a cheque or bank draft, the cheque or bank draft must be in the standard format approved by Payments Canada. Your image must include all information we require, including the date, drawee institution, payee, amount in words and figures, signature of the payor, cheque or bank draft number, and magnetic ink character recognition information. All of the information must be readable in the image as we, in our sole discretion, determine. You will only create images from the original cheque or bank draft.

You will only deposit a cheque or bank draft that is payable to you directly, drawn on a Canadian financial institution and is dated not more than 6 months prior to the date of deposit. We will not accept cheques or bank drafts that are payable to someone else, to two people jointly or endorsed to you. You will not use the Remote Deposit Service for illegal or fraudulent purposes. You will not take any action which may damage the security or integrity of any of the Remote Deposit Service, or cause harm, or threaten to cause harm, to any other user of the Remote Deposit Service. We reserve the right to restrict, suspend or cancel your use of Remote Deposit Service at any time, with or without notice to you. We may set limits on the number and amount of deposits, and we may change those limits without notice to you. You will not deposit a cheque or bank draft that is post-dated, stale-dated, or altered in any way, or that has previously been deposited.

Your cheque or bank draft is only considered received by us when the funds appear in your Account. Your money may be subject to a hold period after it has arrived in your Account. Please see “Holds on the money in your Account” in section B-11 below for further information. After successful deposit, you must write “deposited” across the front of the cheque or bank draft. You will keep the cheque or bank draft for 90 days, and provide it or a replacement image to us if we ask for it. You will destroy the cheque or bank draft within 30 days after the 90 day period.

We reserve the right to reject any image sent. We are not responsible for any images that we do not receive. Receipt of confirmation does not mean that the transmission was error-free or complete. If the deposit amount does not match the amount in the image, we may adjust your Account to reflect the amount in the image. You will be responsible for any costs to obtain a replacement cheque or bank draft, if required.

When you use Remote Deposit Service, you are acting as our agent for the limited purpose of creating the image. You will not pass this role on to anyone else. Any image that you create will be treated for legal purposes just as if we had created the image ourselves. Each image we accept will be treated as an eligible bill under the Bills of Exchange Act (Canada) and each image is subject to the Payments Canada rules. We may from time to time apply additional rules governing the cheques and bank drafts we accept, and your use of Remote Deposit Service. Each image received by us will have the same effect as if the original cheque or bank draft was delivered to us for deposit.

We use Central 1 as a service provider for our Remote Deposit Service. You agree that Central 1 is entitled to the same protections from liability, and limitations of liability, as we have in this Agreement. You give us, and to our clearing agents (including Central 1), your consent and the right to provide the Remote Deposit Service, and to deposit and clear eligible cheques and bank drafts using the images and associated data (which may include your personal information).

April 11, 2021
2:19 am
Loonie
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My search of the page cited (Ctrl-F) doesn't reveal any Section B-11. Has anyone located it?

April 11, 2021
5:20 am
Alexandre
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Electronic Transfer - It typically takes 1-2 Business Days for funds to arrive in your Account after you make the electronic transfer request. Your money may be subject to a hold period after it has arrived in your Account.

I would not be surprised if this is standard wording used by every FI, but not very many FIs actually put hold on money that came by means of Direct Deposit. Such as transfer initiated from other FI, salary, CPP/OAS/GIS payments, etc., etc.

Which was the point of my original post.

It appears first $100 of direct deposit to Neo Savings is available immediately on funds arrival. The remainder is on hold by 5 to 8 business days - will confirm it in few days, my direct deposits to Neo Savings were initiated 3-4 business days ago.

If you sign up with "Neo", you are entering into a contract with Concentra as the Bank, and Neo as the tech provider. Buyer beware.

As long as you are not implying Neo guys can run away with customers' money, what else should be of concern?

April 12, 2021
1:57 pm
Londonguy
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Alexandre said

As long as you are not implying Neo guys can run away with customers' money, what else should be of concern?  

I don't think anyone was suggesting a fraud risk, but it's not necessarily about a so-called bank running off with your money.

When you have a split business relationship like this, when something goes wrong with your account (fill in any scenario you'd like here), it can create a situation where the two parties involved point their finger at the other guy as to who's got the problem, who screwed it up, who's going to fix it, and who's responsible for interacting with and satisfying the customer. In the worst cases nobody takes ownership, leaving you twisting in the wind with each party telling you to talk to the other guy

April 12, 2021
2:05 pm
LK
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Londonguy said

Alexandre said

As long as you are not implying Neo guys can run away with customers' money, what else should be of concern?  

I don't think anyone was suggesting a fraud risk, but it's not necessarily about a so-called bank running off with your money.

When you have a split business relationship like this, when something goes wrong with your account (fill in any scenario you'd like here), it can create a situation where the two parties involved point their finger at the other guy as to who's got the problem, who screwed it up, who's going to fix it, and who's responsible for interacting with and satisfying the customer. In the worst cases nobody takes ownership, leaving you twisting in the wind with each party telling you to talk to the other guy  

My view is that Concentra (as the "bank") would have to ensure compliance with all federal regulations in relation to the account, so likely not too much twisting in the wind. Concentra is on the hook. But, yes, this is a "first in Canada" scenario (according to them*), and so the details will be in the Savings Agreement among the three parties (customer, Concentra and Neo Financial Technologies).

* https://www.concentra.ca/pages/article.aspx?gp=About%20Us&sub=News%20Item&itemnum=173 [Concentra itself is representing that this is a "first-of-its-kind collaboration" arrangement]

One wonders if Concentra doth protest [represent] too much.

April 12, 2021
2:56 pm
Loonie
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It could be like a computer problem or other technology issue, where the software guy blames the hardware guy and vice versa when something goes wrong.

I am wondering why Concentra went this route at all. They're a bank. Why aren't they doing it in-house? Why did they give the "naming rights" on this to another company which is best known for the connection to the questionable SkiptheDishes outfit and which is only under contract, presumably time-limited? Why is the account not named after Concentra in some way? There are a lot of unanswered questions.

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