It doesn't take 10 days to clear a check. It takes 10 days, or more (in some cases) to BOUNCE a check. Like most corporations, IB does not get a list every day of those checks that have cleared. Few banks provide such a service (C isn't one of them for less than a BIG fee). Most banks will submit a bounced check (NSF) a second time for corporate customers and there is sometimes a waiting period (up to 7 days - determined by the bank - not the customer) before the second submission. If it is returned on the second pass, it is then officially bounced and the presenter is notified. By the time the bounce shows in the electronic records available to the customer, it can easily be 10 - 15 business days. There are many hucksters out there who will adjust their acct balances and write smaller checks to firms like IB to test their submission timing. Once they have the timing down, they go in with larger funds and clean up using arb strategies or other non-market related schemes. Some people make a living doing this. IB is especially susceptible because they are largely electronic. Do you doubt for a moment that IB does not want you to have your deposited funds to trade at the earliest moment possible? Not a chance. They are balancing risk with customer service. In doing so, they have created a tremendous incentive to wire funds. Firms with more lenient policies are likely writing off a good bit of bad $$$ each year. I suspect that cost is passed along to customers.
I stand corrected. And, yes, I'll quit whining. Sometimes, when you're the little guy, you assume the institutions do things to squelch you (a la the PDT rule). But, as you pointed out, IB always the opposite philosophy which I genuinely appreciate. I'll try to subdue my paranoia in the future...
IB handles checks exactly as they promise. Ten days to clear. I wish it was faster, but as long as they do what they say they are going to do, I won't complain.
Depositing with IB: If you have a Citibank checking account, use Citibank's online bill-payment method to write a check to IB. Using this method, my checks are deposited into my IB account usually within 3 business days. I know it's not next day or within the hour like a wire, but it's the next best thing when you're only writing a check, and it's free. ==PA
thank you ktm for explaining the situation very clearly and why it takes so long to be certain funds will clear. peace, that is an excellent way to handle the issue - assuming you are willing to open a Citiibank account.
The 10-day business waiting period is fine with me. But I don't understand why it takes IB 8 (eight) days to acknowledge receiving my check. For some reason I imagine a little ol' 80 year old woman in the back room processing these checks...
OK, so why are cashier's checks from credit unions treated like personal checks, rather than cashier's checks from a regular bank?
have you read about the latest Nigerian scam? I believe those checks can still bounce. 8 days to acknowledge receipt? My guess is you should direct most of that complaint to the US postal service. Also keep in mind that IB has tens of thousands of active clients. Anything done manually (like open an envelope, go to a bank to deposit a check, enter the info into a dbase, etc) will take more time than anything done electronically. If you urgently want funds credited to your account, send a wire. It is amazing that so many of you are complaining about this. Yes, wires might cost you some money. However, on average the brokerage savings more than make up for this.
Agree! I don't see what the big deal is. Outgoing wires at my bank are $19. I'd rather be trading than waiting 2 weeks to save $19.