Bank is sitting on my CD

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diyinvestor
Posts: 55
Joined: Sat Jan 21, 2012 2:36 am

Bank is sitting on my CD

Post by diyinvestor »

Are there bank regulations about the maximum time it should take to close accounts and tranfer funds?
I had a fairly large CD mature on a Monday. The bank didn't close the account until the following Friday -- a whopping 4 days later.
The bank says it was "backed up" and too busy to close the account, and that it will take an additional 3 days to transfer the funds via ACH to my other bank. All in, the closing and ACH transfer will take 7 days.

Can a bank use the excuse that it was "backed up" to keep deposit money like this?
Does anyone know of a bank regulation that requires speedier account processing than 7 days -- 4 days to close and 3 to transfer?
After all, they're getting free use of the money.

Thanks.
MrJedi
Posts: 3540
Joined: Wed May 06, 2020 11:42 am

Re: Bank is sitting on my CD

Post by MrJedi »

You'll need to look up your specific CD terms since it is not in a demand deposit account.
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Wiggums
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Joined: Thu Jan 31, 2019 7:02 am

Re: Bank is sitting on my CD

Post by Wiggums »

I’m not aware of any banking regulations.

At Ally, I logon and tell the system what to do with the CD ahead of time. Four CDs later, I never had a delay like you described. Based on the timestamps, it appears that their CD process is automated.

At Capital One 360, I spoke with a customer service rep on the weekend where they closed the CD and transferred the proceeds to another account that I had within the bank. Then I transferred the money to Vanguard.
"I started with nothing and I still have most of it left."
nalor511
Posts: 5060
Joined: Mon Jul 27, 2015 1:00 am

Re: Bank is sitting on my CD

Post by nalor511 »

Time for a new bank, just suck it up. I had Ally sit on my money doing nothing for 3 days, due to a system error they refused to acknowledge, but they did eventually (after hours on the phone and much stress) agree to wire me my money so I didn't have to wait any longer past that point. If you ask maybe they will wire you for free due to this delay. But as the other person said, it's better with CDs to have your instructions given ahead of time.
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arcticpineapplecorp.
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Joined: Tue Mar 06, 2012 8:22 pm

Re: Bank is sitting on my CD

Post by arcticpineapplecorp. »

I once tried to close a CD in a bank in NJ. They actually told me I couldn't close it unless I came to the bank in person.

Since I live in another state I thought this was the dumbest policy I ever heard.

To lay waste to the utter stupidity of such a response without any thought I inquired...

"So you're actually telling me if I live in Japan I have to actually fly back to the US in order to close my CD?"

They could not argue with any credulity.

Had to get me to a supervisor who allowed me to close the acct through our correspondence mostly online.

"The best way to argue with a stupid person is to let them know they're being stupid." J.F.C. Fuller
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
mpsz
Posts: 516
Joined: Sat Jan 09, 2016 6:11 pm

Re: Bank is sitting on my CD

Post by mpsz »

diyinvestor wrote: Fri Oct 22, 2021 12:34 pm Are there bank regulations about the maximum time it should take to close accounts and tranfer funds?
I had a fairly large CD mature on a Monday. The bank didn't close the account until the following Friday -- a whopping 4 days later.
The bank says it was "backed up" and too busy to close the account, and that it will take an additional 3 days to transfer the funds via ACH to my other bank. All in, the closing and ACH transfer will take 7 days.

Can a bank use the excuse that it was "backed up" to keep deposit money like this?
Does anyone know of a bank regulation that requires speedier account processing than 7 days -- 4 days to close and 3 to transfer?
After all, they're getting free use of the money.

Thanks.
3 days seems reasonable for an ACH, but the 4 days in delay does not. A bank should understand how to open and close a CD since it is a routine part of their business. You may succeed in arguing in that you are owed 4 days of interest, but you should do the math to see if it's worth your time.
Doctor Rhythm
Posts: 3061
Joined: Mon Jan 22, 2018 2:55 am

Re: Bank is sitting on my CD

Post by Doctor Rhythm »

diyinvestor wrote: Fri Oct 22, 2021 12:34 pm Are there bank regulations about the maximum time it should take to close accounts and tranfer funds?
I had a fairly large CD mature on a Monday. The bank didn't close the account until the following Friday -- a whopping 4 days later.
The bank says it was "backed up" and too busy to close the account, and that it will take an additional 3 days to transfer the funds via ACH to my other bank. All in, the closing and ACH transfer will take 7 days.

Can a bank use the excuse that it was "backed up" to keep deposit money like this?
Does anyone know of a bank regulation that requires speedier account processing than 7 days -- 4 days to close and 3 to transfer?
After all, they're getting free use of the money.

Thanks.
Last time I closed a CD at a national brick and mortar bank, they said it would take a week for the account to show the closure. Thus, 4 days doesn’t seem too long.

Do you have written confirmation (email or screenshot from their app or website) that they have received your closure request? I’d make sure you get that prior to the expiration of the grace period.
NabSh
Posts: 377
Joined: Fri Dec 25, 2020 11:09 am
Location: USA

Re: Bank is sitting on my CD

Post by NabSh »

On same topic. I had a CD and MM account with Ally. I opened an investment Brokerage account with Ally, because they had new account bonus. First they took time to verify "me". Even though I have been with Ally for 10 years. Then Ally put a hold on new funds for about 1 week. I was upset about so I told them to close the account and return brokerage funds via ACH. They took another 1 week to return my own funds. So basically lost 2+ weeks
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