Discussion in 'Retail Brokers' started by RXIS, Aug 8, 2005.
Why does IB hold onto deposited funds for a week before crediting the account?
Always wire your money. Never use a check.
It says on their web page on the deposit page there is a hold on checks. My guess is to verify the check is valid.
They hold it because people have played games with checks and unverified funds and ripped off brokers in the past. One or two wacky Chinese guys ruined it for everyone.
How do you know it was two chinese guys?
it wasn't any particular nationality. US checks actually can still bounce after a bank releases the funds. the hold period was put in place to avoid reduce this risk. the link below is one example of why the hold for checks is in place...
Holding check proceeds superficially seems businesslike; however there are paperless mechanisms to transfer funds quickly without paying fees such as those involved in wire transfers.
My last check, which was sent by my bank's online bill payer, was not credited to my IB account for almost 4 weeks; that credit followed an "Trouble Ticket" initiated by me.
I also have several accounts with Fidelity, and their Moneyline works efficiently and without delay to transfer funds in either direction without a direct charge; I believe it is actually an ACH transfer. Even the federal government has a mechanism to accept ACH-like electronic transfers for quarterly and year end tax payments. Of course, one can transfer an entire account from one broker to another electronically.
Although I am a GREAT fan of IB, it is possible that playing the float on checks, cost shifting, and/or back office problems are additional factors in the delay.
In addition to wire transfers, IB (and probably others) offers a bi-drectional ACH (Automated Clearing House), fully electronic, funds transfer to / from your bank. Works well.
OK. Korean. My mistake.
You are right, IB does have ACH capability; I just registered to use it. Now I can avoid sending a check and waiting as I detailed above.
Thanks for the correction.
There is still a hold on ACH, though its shorter,
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