Holds on transfers | General financial discussion | Discussion forum

If it is EFT, then it should be immediately available for use once the clearing house processed.

Most businesses and individuals that are doing payroll transactions via an FI and/or individuals that transfer money or pay bills via EFT. Can you imagine you need to wait for a few days for your pay check?

I always use the main bank like TD/CIBC to inter-transfer among my high interest savings, and never be on hold once the money shown up in main bank. The only catch is the two business days for the fund to show.

Of course, when coming to Tangerine and EQBank etc, they can dictate their own holding policies. So they are not right for inter-transfer.

AltaRed said
I think all inter-institutional EFTs take 1-2 business days. Never seen it any other way myself, but I've also never seen a hold once EFT funds were in fact deposited into the receiving account.  

https://www.eqbank.ca/general-banking/legal/hold-funds-policy

Based on previous comments, I suspect AltaRed only does these transfers through brokerage account and in/out of Big Five. The brokerage route may operate more smoothly although usually offering lower rates because one has more investments there and they know more about you.

As far as I can see, it's normal for the alternative FIs that most of us use to have holds that seem unconscionable. I have never heard any of them justify this but imagine they would cite the potential for the sending FI to rescind the transaction because it was somehow fraudulent.
It irritates me that there seems to be no way of circumventing these arbitrary rules. Holding periods seem to be increasing, from what i have seen. It's a one-size-fits-all solution which they deem necessary when there is no face-to-face contact.
They do seem to be inordinately suspicious of bank-to-bank EFTs when dealing with personal accounts as opposed to corporate (paycheques, OAS, pension plans, annuities from insurance companies, etc.)

Rick has reminded us that one approach is to set up as many direct links as you can. Then you only have one delay, rather than going through a hub which takes two delays, and to pull or push depending on which is going to be faster. EQ, for example, allows 10 links. Depending on how many FIs you deal with, this may be a bit of work but worthwhile in the long run. In some circumstances, writing yourself a cheque and depositing online may be a solution as it only involves one delay.

Even worse are the FIs which don't even execute your instructions for a few days, such as Motus.

Bottom line is, they are getting away with it. I'm open to hearing there is a good reason for it which can be verified, but have heard none so far.

OK, so they are concerned about possible fraud. But this does not really hold water with me. Why are they so suspicious of fraud with regular customers with good credit ratings and no negative histories with them? To be consistent, if FIs have 7-10 days in which to rescind a transfer, then, logically, the hold period should be 11 days, but none is that long. And why are the large banks, with lesser hold periods, less concerned about fraud?
It's up to the sending FI to ascertain that the money is actually available before they send it, and I think we would all understand if the funds were not sent because they were not there or had not cleared.
Perhaps this is the cost, to us, of doing business with a smaller FI, the trade-off for better rates.

Saver-Mom said
Why are there holds on transferred funds?

…I understand if a cheque is deposited they want time to verify if funds are available in sender’s account, but why have holds on funds transferred electronically? Do they all do this?

That's not how cheques and preauthorized debits are really cleared. With a pull, by paper cheque or electronic pre-authorized debit, one is taking funds and not sending it.

When one takes or pulls funds, the holder of the account being debited has a window to dispute the debit and have the debit returned. Insufficient funds (NSF) is not the only reason the debit can be returned for.

As well, there's no actual positive confirmation from the financial institution of the account being debited. If the pulling financial institution doesn't hear anything negative back after certain number of days, then the pull is presumed to not have failed for certain reasons. The number of days for the various return reasons are in sections 4, 5, and 6 of Rule A4 and in section 23 of Rule H1.

For reasons like NSF, windows is small. The drawee financial institution must return the item "no later than the Business Day following receipt by the first organizational unit of the Drawee that is able to make or act upon a decision to dishonour the Item".

For some other reasons, 90 calendar days are allowed. For paper cheques, some reasons are allowed up to six years later!

Just because a pull doesn't bounce within the NSF time window doesn't mean the pull can't bounce for some other reason later.

As Doug suggested, one needs to push funds to actually send money. When pushing, the transaction is final. The sender cannot afterwards take the money out of the recipient's account through the clearing system. That's why there are no holds on funds pushed using direct deposit, wire transfer, or Interac e-Transfer.

I find the attitude of distrust, enshrined in rules and regs, towards each and every Canadian, unacceptable. The attitude seems to be "guilty until proven innocent" and "we can do this because we've got your money and you can't stop us".
You can't even hide it under the mattress any more (not that you would want to) because then they are suspicious of it because it wasn't residing in a bank ledger.
Almost none of us are into "money laundering". We have lifetimes of banking experience, often with the same bank. They know who we are, sometimes personally if in-branch. They should get a grip on themselves and be realistic. It seems like they're too lazy to run the proper filters.
Way too much Big Brother.

I skimmed through the links provided by Norman and could not find anything specific about holding periods for average everyday situations other than the quote he gives from Rule A4, which does not add any clarity since we can't know when an item might reach a particular desk or if it will ever be reviewed by any human being, which seems increasingly unlikely in most run-of-the-mill situations.

Maybe I missed something, in which case I hope someone can point me to the clearer wording.

Otherwise, I conclude that Doug's comment that the procedure is five days after deposit for online and four days for teller is a convention.

For Saver-Mom, it seems you must have pulled when you shoulda pushed! Somehow, I doubt they teach this important distinction in "financial literacy" classes.

Loonie said
I skimmed through the links provided by Norman and could not find anything specific about holding periods for average everyday situations other than the quote he gives from Rule A4, which does not add any clarity since we can't know when an item might reach a particular desk or if it will ever be reviewed by any human being, which seems increasingly unlikely in most run-of-the-mill situations.

Maybe I missed something, in which case I hope someone can point me to the clearer wording.

Otherwise, I conclude that Doug's comment that the procedure is five days after deposit for online and four days for teller is a convention.

The cheque hold period used to be a Voluntary Code that Canadian banks and federally-regulated financial institutions agreed to and which the Canadian Bankers Association oversaw. Under the Harper government, they sought to formalize this regulation and originally wanted a 3 day hold period. However, the industry sought and won some concessions, notably the longer hold period and that the shortened hold period only applies on cheques up to $1,500. For cheques over $1,500, the requirement is 7 business days, which is what it was before. See: https://laws-lois.justice.gc.ca/eng/regulations/SOR-2012-24/page-1.html#h-785130

For Saver-Mom, it seems you must have pulled when you shoulda pushed! Somehow, I doubt they teach this important distinction in "financial literacy" classes.  

LOL, what financial literacy classes? A major bone of contention for sure, and I agree that unless you have experience from the financial industry (as I do) or you've looked into it extensively (like Rick and Norman), you don't became aware of these subtleties. 😉

Cheers,
Doug

Thanks for the link, Doug.
The more I read, the more absurd it seems to get.
According to these Regulations, which I think are worth repeating here, it can take 9 (nine) business days, including the day of deposit, for a hold to evaporate since many of us are doing online transfers greater than $1500. Throw in a stat hol and you have a full two weeks!

"3 An institution must make available for withdrawal any funds deposited by cheque or other instrument to a retail deposit account or to a deposit account held by an eligible enterprise

(a) in the case of a cheque or other instrument not exceeding $1,500, no more than four business days after the day of the deposit if it is deposited in person with an employee at one of the institution’s branches or points of service or no more than five business days after the day of the deposit if it is deposited in any other manner; and

(b) in the case of a cheque or other instrument greater than $1,500, no more than seven business days after the day of the deposit if it is deposited in person with an employee at one of the institution’s branches or points of service or no more than eight business days after the day of the deposit if it is deposited in any other manner."

So, I guess we're supposed to feel privileged if it only takes a week!

I recently made two transfers to EQ Bank, one from Motive and one from Hubert. The transfer from Motive took 5 business days to clear. The transfer from Hubert was accepted and available the next day!

Not sure what logic is being applied here.