Alterna Transfers | Alterna Bank | Discussion forum

dougjp said

Because the last thread was closed and we were invited to start a new thread on the subject...

I noticed this on the web site, not sure if it is new;
https://www.alternabank.ca/Personal/EverydayBanking/Me2Me/

All I want to know is, what are people experiencing now, are transfers to and from the linked 'A' Bank chequing account working fast both ways now? Have the promised improvements been made, and is it as fast as, say, Canadian Tire Financial, Canadian Direct Financial, Bridgewater or Peoples?

Works for me now, since last week (May 8, 2016). Successfully transferred the money from Alterna to Tangerine, by linking and initiating a transfer on the Tangerine side. So, it looks like this has been done and is now working.

I am concerned and uneasy about the outgoing transfer limits, $25k daily, $50k weekly and $125k monthly. Incoming transfer limits are $100, $250k and $500k for those time periods. Why have any such limits? It's my money! If it can be securely transferred in, why not out? Plus, they say "For security reasons, there may be a 4 business day hold on outgoing Me-to-Me transfers." Sounds excessive! Aren't holds usually only on incoming funds? Opinions?

All FIs have ways of limiting withdrawals. This is particularly true with cash withdrawals, but can apply to any.

A while ago I needed to take something under $5000 in cash from TD. (I just needed to walk it to the other end of the block to cover a pre-authorized debit at another bank, as there wasn't enough time to wait for it to clear through any other means.) They hummed and hawed quite a bit before they finally let me have the money. It didn't matter at all that they knew exactly who I was both by ID and by personal recognition or that I had well beyond the money required to cover it in my accounts or that this was not really a lot of money, for a bank. I had apparently exceeded their withdrawal limits. They let me have it, presumably so as not to antagonize me to the point where I might take ALL my business down the street. There is probably something about this in the fine print somewhere in the account holder agreement.

Yes, it's your money, but not entirely. You have chosen to deposit it in a bank. You did not hide it under the mattress or put it in your household safe. You have, in effect, loaned it to the bank, even if they don't pay you any interest. And they do with it what they will. They also make the rules. And governments and regulators make another level of rules. And, at a more extreme level, the International Monetary Fund makes more rules. Remember the line-ups in Greece a year or so ago as people tried to get their money out of the bank but couldn't due to imposed restrictions?

I suspect that most people would be quite surprised to learn of the low reserves that banks maintain relative to deposits. It runs somewhere around 10%, depending on the bank. You can find this information in their annual reports, which are typically online. I happen to have looked at CIBC's recently, which was around 10%.
At one time this was regulated, but that was removed quite a while ago (although the requirements weren't particularly high). I must confess I don't really understand the system that is in place now.
Some cautious-minded commentators have suggested that 20% reserves would be reasonable. However, the reserves are never going to be such that everyone who wants their money out on a particular day is going to be able to get it all, if demand is extremely high.
Banks must protect themselves against that eventuality because our system of fractional banking assumes low reserves. You have deposited your money, but it isn't actually there any more. It has gone on a long complicated journey, and, to quote from another genre, "It's 10pm, and do you know where your money is?" No, you don't. Nobody does, exactly, because yours is all mixed in with mine and everyone else's. However, you can get some clues by reading the bank's annual reports. At this point, you might find yourself upset, because you will see that they are invested in things that you would never consider investing in by yourself as they do not meet your risk tolerance. You hope they work out well enough that you get your money back, with promised interest, if any.

So, I don't find these limits unusually troublesome. It's a sign of caution, and, as has been said, they are a smallish institution, so that a 10% reserve would be much less in absolute dollars than 10% at, for example, TD. In this case, size offers flexibility.

I wouldn't be surprised if we see tighter limits in general in future. We can now move large amounts of money quickly, due to the arrival of so many online options. If the end result is that a lot of savvy customers figure out the advantages of so doing, this could, theoretically, cause instability in these FIs. They wouldn't like that!

I'm not suggesting that anything as dire as what happened in Greece is about to happen here, but neither am I saying it couldn't. Folks there were surprised and horrified. It does illustrate clearly that, ultimately, we don't call the shots.

It's something to be aware of. Personally, I would not be concerned about the Alterna limits unless I could foresee that I was going to need to make large urgent transfers. In that case, I would look for a bank that had more liberal limits, which would probably be a large bank. Corporations move vast sums daily (on paper), so we know it can be done, but that is a different kind of scenario and has money going both ways whereas you are only anticipating withdrawals.

I would want any FI into which I deposit my money to be stable. One way for them to try to ensure that is to have these kinds of limits. I would rather they didn't run out of money in the short run.

I am not too concerned about the 4 day hold on transfers-out. It's a nuisance, but I think we may see more of this in future too. We are all learning, and the banks are certainly learning, that there is no such thing as 100% fool-proof security. The hold period allows them time to notice unusual patterns of activity and diagnose them before things go haywire.

I think they're being cautious, and that's OK with me.

Alterna rep, why the huge difference in amounts allowed on transfers out vs in?

I used the me to me transfer and it works well. My only concern is with the removal of funds being restricted to 25,000 daily 50,000 weekly. That would mean that it would take at least 8 to 10 days to remove 100,000. Another institution that I deal with that has similar on line restrictions is Meridian but since I have a local branch you can remove all of yours funds at the branch the same day. I have no local Alterna branch. Some other institutions allow you to circumvent any restrictions by calling in and doing the transfers over the phone when the amount exceed the online limit. Maybe Alterna could consider such a policy when someone needs their money right away.

I agree with Bill but don't know the answer to his question.

I am wondering if this information is even stated in the FIs' legalese sections. It's not easy to find this on the Alterna site. In this particular case, since deposit insurance caps well below the monthly withdrawal limits, it's less of an issue for most, but, still, a consideration for some.

I must admit I am somewhat confused by the limit. What if, for example, you were buying a new car or house and therefore needed a money order for an amount larger than 25K? This is a normal transaction that most people expect to make periodically.

There could be a problem too in keeping up with any changes.

Loonie said

I agree with Bill but don't know the answer to his question.

I am wondering if this information is even stated in the FIs' legalese sections. It's not easy to find this on the Alterna site. In this particular case, since deposit insurance caps well below the monthly withdrawal limits, it's less of an issue for most, but, still, a consideration for some.

I must admit I am somewhat confused by the limit. What if, for example, you were buying a new car or house and therefore needed a money order for an amount larger than 25K? This is a normal transaction that most people expect to make periodically.

There could be a problem too in keeping up with any changes.

The $25,000 per day, $50,000 per week, and $125,000 per month are the sending (outgoing) limits for Me-to-Me Transfers. See Me-to-Me Transfer FAQ's.

Those are not the withdrawal limits for the eSavings account.

I suspect one could open an Alterna Bank eChequing account, transfer funds from one's eSavings account, and write cheques that exceed those limits. Perhaps, one could order a bank draft and have it couriered.