Unable to transfer fund out | Alterna Bank | Discussion forum

xup6.yc said

The TLDR is as Top It Up said.

Since I need the money quite urgently, I've called them up instead of waiting for the email reply.

Turns out, at alterna bank, any withdraw from registered accounts, TFSA and RRSP, can only be done thru calling them directly.
I'm not sure why they have this policy, since I can withdraw from registered accounts online at other banks, I guess they don't want people moving money out?

It does make things complicated and slightly annoying, for example, what if I need money urgently, and it's not their business hour?

For future reference, I'll probably move my emergency funds out of alterna, and treat alterna as a GIC.

*side-note: the funds doesn't get transferred immediately, tho it shows up on Account Activity, the Current Balance doesn't change, you'll have to wait a day(s)?  

Implicity is the same way. Have to phone to get the money out.

It should be more difficult to transfer funds out of registered accounts. After all, there is extra paperwork involved by the FI to record and transmit that information to CRA for each transaction, and taking funds out of registered accounts should be considered more seriously than just 'any' account.

The extra step of having to phone or even fill out a PDF form seems like the right thing to do to cause pause to the individual to think more seriously about withdrawals. If the OP does not already know, s/he cannot re-contribute the withdrawal amount for that specific contribution space again until the next calendar year.

Maybe. Do you know how the FI informs and provides the data to the CRA? I am guessing it is probably collected and held until about Feb of the following year and then there is a whole data dump to them for everybody.

Someone still has to maintain that and do the checks and balances to make sure all is well with what is being submitted. My prior experience with databases is that they do not take care of themselves. IOW, it still costs the FI some time and money.

Alterna Bank does not provide online outgoing Me-2-Me transfers for their registered accounts:

Are M2M transfers an option for making contributions to the RRSP and TFSA eSavings Accounts?
Absolutely! M2M transfers are a fast and convenient way of making a contribution to your RRSP and TFSA eSavings account.

Are Outgoing M2M transfers available on the RRSP and TFSA eSavings Accounts?
No, Outgoing M2M transfers are not available on the RRSP and TFSA eSavings accounts.

More limited access to registered accounts is quite common. TFSA and RRSP accounts are actually trust accounts. One doesn't actually have direct control of the accounts. The accounts are in the name of a trustee, in trust for the RRSP annuitant or TFSA holder.

In the case of Alterna Bank, the declarations of trust name Concentra Trust as the trustee. I think someone representing Concentra would have to sign off on the withdrawal.

As you suggest, an FI that pays more interest likely has to cut costs in other areas. Can't have one's cake and eat it too. Don't like it....don't have an account at Alterna. Really is that simple.

My perspective is likely different than many on this site. I put my money in the common equity of FI's, not their products*. Thus I want them motivated to higher earnings and profits for a business model.

*Added: Not quite true. I have circa 3% of my investment portfolio in GICs

Bill said
"And, besides, who could believe them as they've lied to people over and over again in the past." Well, I suppose a general allegation of chronic and long-term lying by "they", who it appears are the (some? most? all?) employees of financial institutions (an FI is not a human so can't lie, so the reference is to people who work there), is something that has its place on a forum that allows adults free expression, but for balance I'd like to offer another view. As far as I know I've never been lied to by an employee of an FI and any acquaintances or family I know who work for FIs don't seem to be habitual liars, as far as I can tell. (Full disclosure: I've never worked for an FI or in the industry.)  

I don't think I'm have been lied to either. But feel that I have spoken to seasoned FI employes that have been subjected to so much training/brainwashing that I have not recieved a "best answer". AND I know I spoken to new hires that are often answering phones and emails as part of their training and have provided incorrect off the cuff responses.

It's good to know that some of you don't feel you've been exactly lied to at your bank.

There are numerous examples which have come to the fore, especially in recent years, and most of us have probably been aware of them at one time or another. The most recent are the revelations from almost 1000 bank employees to the media, which were noted earlier in this forum. If you're the sort who thinks the media are not to be trusted, I can't help you there, but, personally, I can't ignore 1000 voices speaking out. I also had occasion to meet one of these ex-employees last year, and the story was the same.

Ever been told a certain mutual fund was a sure thing based on its recent past performance? had no fees? and was ideal for someone like you? Ever been told you've been offered the best mortgage interest rate? Ever found out later that these things were not true?

I was told quite recently that a certain fund had no fees. There is no such thing as a fund which has no fees.

There are misrepresentations but not necessarily lies. Some times it is employee ignorance of the facts and/or misinterpretation of the question.

The issue about 'no fees' on mutual funds is one of the most blatant because while it is true there are no direct fees paid by the investor, there are indeed fees paid to the mutual fund managers from the mutual fund itself, e.g. money management fee and the trailer fee, that takes profits away from the investor. That one needs to be corrected, and is partly corrected with the new reporting requirements on disclosure of trailer fees paid (but not fund expenses, nor money management fee).

As Top It Up says, investors don't do their due diligence and the question really is.... how much regulatory oversight should there be to protect someone from themselves? We put safety railings along steep dropoffs to help prevent idiots from falliing over the edge, but should we also put safety nets over the edge in case someone is stupid enough to climb up and over the saftey barrier and fall off? How far do we go to protect people from themselves? I don't know the answer but surely there should be some expectation of people looking out for themselves.

As to the 'lowest' mortgage rate, I don't know anything about that issue since it's been over 25 years since I had a mortgage, but I've heard enough anecdotal evidence to know there are some 'discretionary' rates to be had that are lower than posted rates, e.g. friends and family rates, valuable customer rates, etc. These are not exactly lies, but of course, exceptionally annoying nonetheless.