30 Day Hold on TFSA Funds - Isn't this an absurdly long hold period? | Page 2 | Motive Financial | Discussion forum

Why, then are these transfers typically done by an FI sending a cheque to another FI? I agree it's not terribly secure or reliable. Why not use a better route?

Also, if there were any concern that a draft might be fake, all they have to do is phone the issuer - at least in theory. I once got a bank draft at HSBC after closing an account which I then walked across the street to TD where I had a longstanding account. The guy at TD looked at it like it came from Mars and was reluctant to even deposit it. I told him to phone across the street and gave him the name of the person I'd just dealt with but he wouldn't. Eventually, after consulting with a manager, he decided to deposit it. Lord knows how long they held it; i don't remember.

By contrast, when I bought a new car a few years ago, the dealer specified that only a bank draft would do. I presented the draft and drove off with my new car, which was of similar value to the HSBC draft presented at TD.

Canuck said

That isn't it. As far as I understand it, the funds cannot even be moved to a Motive savings account. They will release the hold if you buy a GIC.

As to the "why" question:

• Because it was a lengthy process to set up my account with them, due to delays (they were busy) and due to the fact that they have an archaic system with all kinds of technical issues. And of course, the more time that passes, the more plans tend to change... so plans changed.
• Because I might need some of the funds due to personal circumstances which have arisen. People should be able to make withdrawls from the TFSA in order to deal with emergencies, pay unforseen bills, etc. That's why a 30 day hold period is so excessive.
• Because I might want to invest a portion of the funds in ways that are not offered by Motive Financial, which should be my prerogative.

  

I've done a few TFSA transfers, EQ Bank to Hubert being the most recent (took about 2 weeks). I'm surprised that you can't even transfer to Motive non registered savings account. When I bought my house years ago I transferred from ING TFSA to my ING non-registered account and then transferred to my main bank to write the cheque for the house.

RetirEd said
Norman1: The bank draft (or equivalent) is recorded at the issuing institution and the funds secured. It is then verified by phone, fax or E-mail at the time of cashing. That's why it can be processed with confidence. Such has been the case every time I've used one, including this month.

I can't say for absolute certainty that such instruments can't be deposited at an ATM or via image, though; I would not expect so. Anyone know more?

That's not the case.

Bank drafts and certified cheques are cleared exactly the same way as regular cheques through the Payments Canada ACSS system. They can be deposited by ATM or phone deposits just like a regular cheque. In fact, they look like a regular cheque.

There's no phone, fax, or e-mail clearing of them.

As far back as twenty years ago, the crooks were able to counterfeit them. There was a warning put out on a local Usenet for sale group. A scammer was paying for items using counterfeit Bank of Montreal money orders.

One victim took the returned money order to a Bank of Montreal branch. The fake was so good the teller thought a mistake was made by the bank's clearing. The fake had all the security features.

It wasn't until the teller keyed in the serial number of the fake and saw that the details didn't match that she realized it really was a fake.

If the scammer can counterfeit a bank draft, then the person can easily counterfeit an accompanying business card with a different phone number for someone unwary to contact for "verification".

There's no telephone certification of bank drafts in Canada. So, any call the receiving bank makes to the issuing bank is meaningless. Consequently, it would be a waste of staff time for Motive to try.

Why would any bank be foolish enough to certify a bank draft over the phone unseen? That the cheque number, amount, payee, and account numbers match only means someone saw the issued draft. It doesn't mean the person actually has the issued draft, instead of a copy of it.

The 30-day hold on the direct-transfer TFSA funds likely has nothing to do with potential problems with the bank drafts involved in the transfers.

More likely there is some limitation in how their banking system handles registered accounts.

Norman1 said

RetirEd said
Norman1: The bank draft (or equivalent) is recorded at the issuing institution and the funds secured. It is then verified by phone, fax or E-mail at the time of cashing. That's why it can be processed with confidence. Such has been the case every time I've used one, including this month.

I can't say for absolute certainty that such instruments can't be deposited at an ATM or via image, though; I would not expect so. Anyone know more?

That's not the case.

Bank drafts and certified cheques are cleared exactly the same way as regular cheques through the Payments Canada ACSS system. They can be deposited by ATM or phone deposits just like a regular cheque. In fact, they look like a regular cheque.

There's no phone, fax, or e-mail clearing of them.

As far back as twenty years ago, the crooks were able to counterfeit them. There was a warning put out on a local Usenet for sale group. A scammer was paying for items using counterfeit Bank of Montreal money orders.

One victim took the returned money order to a Bank of Montreal branch. The fake was so good the teller thought a mistake was made by the bank's clearing. The fake had all the security features.

It wasn't until the teller keyed in the serial number of the fake and saw that the details didn't match that she realized it really was a fake.

If the scammer can counterfeit a bank draft, then the person can easily counterfeit an accompanying business card with a different phone number for someone unwary to contact for "verification".  

Norm, I might be misunderstanding here, but you mention that bank drafts and certified cheques can be deposited by ATM or phone deposits. I deposited bank drafts and certified cheques at ATM no problem, but when I tried to deposit a certified cheque by image on EQ Bank app it was rejected. It went through ok at the time, but when I logged into my account the next day or two it showed rejected. I called EQ and the representative said certified cheques and bank drafts cannot be deposited through their app. Only regular cheques. I had to deposit the certified cheque at my main bank and then transfer to EQ.

Canuck said

You could be right. That would be in line with everything else that I've experienced with Motive's decrepit, archaic systems.

But I'm pretty sure that they said that the hold is only 30 calendar days if the registered transfer is done through a bank draft (as opposed to electronically). But I didn't double check that the last time I called. Although, even in that case, it still might have to do with limitations of their crappy systems.  

Their core banking behind the scenes is actually the same platform as EQ Bank. What we see, MemberDirect, is indeed old and they're replacing it.