Ally bank website and other problems

[ochotona]

Yup, looks like external funds transferring into Fidelity by any route (check, Ach etc) except wires would be subject to the 1-2 week "settlement" hold. From Cash Manager FAQs:

"Funds on an EFT [electronic funds transfer] can take several days to settle into your Fidelity® Cash Management Account."

And the FAQ actually hints about wiring funds to get around the hold time.

It's still potentially a very nice setup though, with the cash manager that lets you specify a sequence of money market funds to draw on, that could be in different accounts within Fidelity. So you'd replace your savings account with a money market fund, and you could use a money market fund that's part of the PP for another layer of backup. That makes the 1-2 week hold a lot more tolerable, though I still wish Fidelity would stop that bit of nastiness. No other broker does that to my knowledge.

1-2 week hold? That's bogus. The more I interact with Fidelity since moving some accounts there mid-2018, the less I like it. I think it's losing the customer experience contest with Schwab.

[dualstow]

So you'd replace your savings account with a money market fund, and you could use a money market fund that's part of the PP for another layer of backup.

I just transfer from a Vanguard money market fund into checking every once in a while.
No savings account for me.

[dualstow]

...
so I started using Fidelity's cash management feature as my primary checking account. I have had zero problems, and have not had an issue with holds. The core fund is a Treasury money market that works nicely with the PP and pays a very competitive interest rate. I looked into doing this at Vanguard, but to get the same features free you have to have over $1M in assets with them, otherwise there is a $30/year fee.

I know that Vanguard recently scrapped their VanguardAdvantage thing, with the debit card. Do they even have any cash management features left?

[WiseOne]

I searched too. Vanguard discontinued their cash management account and there's no replacement. That would have worked even better with the PP, because their treasury MM is way more attractive than Fidelity's.

Pugchief that is good to hear! How do you have your account set up? I personally need to have deep backup to avoid overdrafts or bounced checks, because I'm always spending big on reimbursible travel, and the reimbursements generally don't come in before the credit card payment is due. I got away from Chase originally because I got tired of getting hit with $20+interest overdraft fees, even when my savings account (at near 0 interest) had enough to cover the overspending. Ally's setup with automatic coverage from the savings account has been a lifesaver. I definitely would need that from Fidelity's cash management account to make it a viable replacement.

[WiseOne]

I already had a personal trust account so I just used that. The only downside is no debit/ATM card, which is not an issue for me. If you have your Fido account set up as an individual or joint account, you can get a debit/ATM card. Otherwise, it's just like any other checking account. You ask for (free) checks if you don't already have them, and use the routing and account #s on the check to set up ACH transfers at your other banks. You can also set these up directly at Fidelity. I like to be able to push or pull the money. Note that money that is pushed to Fido is generally available immediately but if you pull it, there might be a hold. I deposit checks via the mobile app and the funds are generally available the next business day. I also moved some extra cash to the prime MM fund which pays a higher rate. They said if there is not enough funds in the core account to cover a debit, it will automatically draw funds from other money markets rather that overdraw the account, if that is a concern. The core account is a treasury MM fund which is safer, but pays a lower (although still competitive) rate.

If you have any more specific questions, feel free to ask.

That's exactly what I find attractive about the Fidelity cash management account. You can basically replace your savings account with one or more money market funds, that can be spread around different accounts (individual, Roth, cash management account itself). You can even keep nothing in the core account and rely on automatic withdrawals to deal with each payment, because unlike savings accounts there is no limit of 6 transactions/month. Not that I could find mentioned anyway. The core account pays only 0.37% interest, it's not a good place to park large amounts of cash anyway (I'm astounded that anyone would want to put in anything close to the $1.25 million cap).

I just wanted to know if anyone's actually doing this. Dualstow, sounds like you sort of are but using manual transfers. I'm way too absent minded to trust myself to do that!

[WiseOne]

Lucky you. Per the website, the core position for the cash management account is fixed.

However: FDLXX (Treasury Only) has a higher interest rate that's fully state/local tax exempt, and there's no longer any minimums on it. I opened it with $200 from within the cash management account, and it would be nice to use this as my "savings account". However, I can't figure out how to put it on the list for the automatic overdraft transfer ("cash manager"). It looks like you can only select accounts and use their core positions, but the website says you can designate money market funds specifically. Anyone know how to do that?

[ochotona]

No limit on withdrawals. I use their online billpay for the few non-electronic payments I have each month.

My core account is FZFXX which is paying 2.09% right now. Not sure what you have that is paying 0.37%, but maybe you can switch it? I do remember having a conversation with one of their reps about the debit card, and I could get one but would somehow end up with a different, crappier core account so I didn't opt for it because I use credit cards and rarely need ATM services. If I do need to use an ATM on some rare occasion, I still have the one from Schwab.

Thanks for pointing out the difference between the Schwab and Fidelity cash options. Yes, Fid seems like a better place to "bank", plus T-Bills auto-roll is nice. Strange how Schwab doesn't just copy auto-roll. It would be super easy to do.

[dualstow]

No limit on withdrawals. I use their online billpay for the few non-electronic payments I have each month.

Isn't that electronic?

A less facetious question: don't you guys have to write checks once in a while? My friends in Europe and Asia don't, but I haven't totally escaped that in the States (nor do I mind, but that's me).

[dualstow]

Ah, I see.

Checks: same story here.

[Tyler]

"Funds on an EFT [electronic funds transfer] can take several days to settle into your Fidelity® Cash Management Account."

I don't currently use the cash management feature, but I use Fidelity and like it a lot. In my experience, it takes about 3 days for an EFT to settle. In the investment account you can purchase securities with that money right away but you can't withdraw it until it's settled, and I imagine it's similar on the cash side. I've personally never experienced anything like a 2-week hold, and I suspect that's an outlier situation.

[WiseOne]

It seems to vary. I've had some transfers go through in a day. Most appear quickly but the funds are listed as "unsettled activity" and thus unusable for anything except buying securities in the account for periods that range from 2-3 days to more than a week. I definitely had at least one 2 week experience - maybe an outlier, but if it happened once it can happen again.

Thanks to the PP philosophy though, I have enough cash that can hang out in money market funds that I don't really have to worry about bouncing checks or bill payments. Still, though, I would not risk relying on Fidelity as complete drop-in replacement for a bank checking account. I really had no problems with Chase except I hated running into overdraft situations. I was thinking to use Chase only for fixed monthly expenses & ATM withdrawals, and pay all non-fixed bills out of Fidelity.

[ochotona]

Schwab has some good purchasable MM options, but they aren't sweep.

https://www.schwab.com/public/schwab/in ... t_treasury

[WiseOne]

Now this is interesting!

I opened a Fidelity cash management account to try it out, connected it to my bank account in both directions, added my Individual brokerage account to the overdraft list, and ran a couple of tests. First, I sent $100 to Fidelity from my bank (sent FROM the bank, not pulling from Fidelity). The cash appeared in the account (in core) and settled within a day. As soon as it showed up, I put most of it into a money market fund (FDLXX) and left just a few dollars in the core account. This trade took the usual 5 business days to settle.

As soon as that trade settled, I tried out the debit card at an ATM machine, for an amount greater than the core account but less than the amount in the money market fund. Theoretically, a debit should be covered automatically from the money market fund, and if that didn't happen for some reason, it would go to the core position in my Individual account. I expected this would be a same-day transaction, since the cash manager runs every night.

I got my cash, but to my surprise this shows up as a "cash advance", and it's debited from the account but taking the usual week or so to settle. A cash advance carries an interest charge of 26%, but other than that Fidelity's website says nothing useful about this. The amount includes the ATM fee, which is supposed to be refunded at some point. Meanwhile, the money market fund and core fund still show their previous balances and are presumably still generating interest.

This is all pretty weird stuff. I would like to use this account, but figuring out the byzantine (and undocumented) rules is going to require a lot of experimenting before I'd do anything more than test transactions. Meanwhile, anyone with experience (MangoMan?) who might know what this cash advance deal is about? Do all ATM transactions show up as a cash advance until they settle, or is this just because the core account didn't have enough in it to cover the withdrawal?

[WiseOne]

Ah, I didn't catch that, sorry. Unlike you, I'd want to use the debit card to pull cash from ATM machines that aren't owned by my primary bank, to avoid fees.

I had much the same conversation with a Fidelity rep and was told the same thing, but I still thought that a test was in order. Should you ever decide to get a debit card, you now know that it apparently runs on a different set of rules from checks. And I still feel the need to check the behavior of billpay (e.g. by making a small mid-cycle payment to a credit card that also exceeds the core account balance).

I also don't know why Fidelity takes 5 business days to settle transactions, but it most definitely does. The ACH push from my bank was 1 day, but buying the Treasury MM took 5 days and this "cash advance" looks like it will also take the full 5 business days. Or longer...I have experienced up to 8 business days settlement time with Fido. Vanguard doesn't do this, and the only bank transaction I've seen take this much time is checks deposited into Ally - they allow you to use the first $200 right away, but hold the rest of the check for 5 days. This is a major source of complaints about them. Chase doesn't do this.

[dualstow]

Unable to see my tax checks (the images) for many days now. Grr.

[WiseOne]

Which bank is that, dualstow?

Still testing out Fidelity. Their transfer software is seriously strange not to mention buggy. I did find that if you push from your bank to Fidelity it takes 1 day for the money to become available, but it's 3 days if you pull from Fidelity. When I tested automated investing (thankfully with small amounts) the thing failed most of the time and generated duplicate transactions with no confirmation or notification. I've used it before but not in a long time, and it looks like it's broken now.

Anyway, I've been enjoying the "Fidelity as a one stop shop" thread on Bogleheads. It appears you can get around the limitations of the CMA by creating a separate brokerage account (call it "checking"), setting its core position to the money market fund of your choice, and set the CMA to draft from this account. Keep a zero balance in the CMA and push money from your primary bank (or whatever source) to the separate "checking" brokerage. Voila, high interest checking with fast transfers and free billpay.

[dualstow]

Ally

WiseOne’s referenced thread, I guess.
🧵 https://www.bogleheads.org/forum/viewtopic.php?t=266538

[WiseOne]

That's the one, thanks for doing the legwork to find the thread. Happy reading.

Hope Ally fixes its software bleeps, but then again I've already given up on them which is why I'm shifting to Fidelity so I can deal with their software bleeps. I wonder if the ever-increasing number of cool features, customer base etc is leading inevitably to increasing software errors which is going to start becoming a major issue. It's one reason why I'm keeping my Chase account - their website is rock solid, and that may well be worth sacrificing a bit of interest and the occasional nasty overdraft fee.

[ochotona]

That's the one, thanks for doing the legwork to find the thread. Happy reading.

Hope Ally fixes its software bleeps, but then again I've already given up on them which is why I'm shifting to Fidelity so I can deal with their software bleeps. I wonder if the ever-increasing number of cool features, customer base etc is leading inevitably to increasing software errors which is going to start becoming a major issue. It's one reason why I'm keeping my Chase account - their website is rock solid, and that may well be worth sacrificing a bit of interest and the occasional nasty overdraft fee.

That's an argument right there for provider diversification.

[dualstow]

Fixed my Ally issues by simply switching to Firefox to log in. The only reason I tried that is because they finally emailed me to tell me I had a secure message waiting. When I logged in via Chrome, I got a mostly blank screen. Tried Firefox, and blam: all my check images are loading now.

[WiseOne]

Good to know, but that's only some of the issues - their mobile check deposit for example. Anyway, still going to switch to Fidelity. I just set up a new brokerage account for the CMA to draft from, whose core account provides the same return after-tax as Ally's account (because of state tax exemption) - and it's for both checking and savings, which are now consolidated into one account. Awesome. I discovered that you really only need the CMA for ATM withdrawals & fee reimbursements - everything else can be done from a plain brokerage account.

The one caution is that when I tested Fidelity's automatic investment feature (which I haven't used in a long time), it was an epic fail. The interface kept quitting with "unavailable" or "unable to complete your request" messages, and then I discovered that it created a whole pile of duplicate transfers with no notification or visibility until they started taking effect. I called Fidelity and got them to cancel as many as they could, but the activity resulted in a bank account freeze which I had to call to get lifted. Geez. Avoid that one like the plague guys. There was a message that the "account features" interface is being redesigned, so hopefully this will get fixed.