Banks rip-off on overdrafts

[Muncher]

http://finance.yahoo.com/expert/article/moneyhappy/40466

There should be a law against them granting overdraft without warning us!

Just like I got an NSF when buying funds thru RBC. Who on earth would think it takes 5 business days to transfer money from checking account to RBC DI?

Even transferring from one bank to another only takes 3 business days max! They told me off when I said that the stupid delays cause me to lose money every time. Like "well you should just understand the process and manage your money properly!!!" Where on their website does it tell you that it takes SO long to transfer your own money from one account to another at the same bank?

[Jungle]

That does seem a little unreasnable, considering that you are transfering money within the same bank between your two accounts.

Most (if not all) banks have a minimum 5 day holds-this is pretty much a standard. If you hold active accounts with good history you can usually ask them to reduce the holds.

I was punished for 6 months with PC for having a NSF, but now I've served my time and I can deposit up to $200 without holds. I had to ask for this change.

[Khrak]

You're talking about an industry that essentially profits by lending out imaginary money.

Do you REALLY expect moral behavior from a bank? :lol:

[veryhuman]

"well you should just understand the process and manage your money properly!!!"

Exactly.

[Muncher]

What process? Did they tell me it takes so long to transfer money between my own accounts at the same bank when they sent me all the ads to open an account? It's all a rip-off!

[Sylvestre]

What process? Did they tell me it takes so long to transfer money between my own accounts at the same bank when they sent me all the ads to open an account? It's all a rip-off!

ah yes, the all-so-common "no one simplified it down to a child-like explanation so that I wouldn't have to do *any* work at all".
Did you ever stop to maybe look into it yourself? Or was that too much work?
Because hey, if something's important to you and there's a chance you could lose money, any intelligent person will make sure they know all the risks involved.

But hey, why do that. Why not just stick your head in the sand and then blame others when something goes wrong.

[Thalo]

I don't know about transferring from one RBC account to another, that should be in real time pretty much. RBC and their investment subisidiaries are different companies though, so it would take just as long to transfer from RBC DI to the bank as it would from one back to another. Further, stocks and mutual funds have settlement periods before which the funds aren't available to transfer.

That article is a load of BS. If you overdraw your account that's through your own stupidity. You can't blame your bank for compensating for your own financial ineptitude.

[Thalo]

Moreover, banks can legally manipulate the order in which they pay checks and debits to maximize fees. Consider this example: Bob thinks he has $1,300 in his checking account, but he only has $1,150. He conducts six debit transactions totaling $180, and then pays his rent, for $1,100. He's overdrawn the account by $130.


Bob's transactions arrive in one batch at the bank. Instead of paying the six transactions and charging a single overdraft fee on the rent check, the bank pays the rent check first, followed by one transaction for $50. It then provides overdraft loans for the other five payments, so Bob incurs five separate fees of $34 each -- or $170. (Banks reserve the right to pay checks in any order; see, for example, the policy of U.S. Bank.)



With Canadian banks the policy is generally to hold back the larger cheque and allow as many as the smaller ones through as possible.


Happily, Page got back in control of her finances with the help of a fellow church member who's a financial executive.


They worked together to create a budget; get on time with her bills; learn to steer clear of high-fee payday loans and check-cashing stores; and pay off her credit cards.


That's how you solve this problem. Not by whining and complaining about banks.

[dlander]

I agree with the OP. 5 days is too long to transfer money within RBC. Even if direct investing is run as a separate business, the IT infrastructure should be better than that.

[Thalo]

IT has nothing to do with it. It has to do with the nature of the investments. I assume the OP means it takes 5 days between when the investments are sold until the money is available in the bank account. If just transferring free cash from the brokerage account to bank account it should take two days tops.