[Split from "Fidelity as a one stop shop" thread - locked or restricted Fidelity account issues]

[ez_mode]

[Moved into a new thread from: Fidelity as a one stop shop --admin LadyGeek]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

[anon_investor]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

How many of those issues were for newer accounts vs people with well established accounts?

Even the reddit threads seemed to indicate the issue was for newer accounts or people doing unusual transactions.

[VictorStarr]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I agree, FIDELITY is NOT a BANK. Fidelity CMA is a brokerage account with cash management services. And for me it is a major selling point for Fidelity. Here are a few benefits that I enjoy:

- My money are in a money market fund that earns fair market rate minus expenses
- Auto liquidation of MMF with higher yields (FZDXX, FRSXX, FNSXX, etc)
- Robust security with authenticator app
- 24/7 US-based customer support
- All the features of premium bank account with zero fees and no requirements
- Usable online interface and mobile app

From my perspective, the only weak side of Fidelity cash management services is a debit card that is served by BNY Mellon and customer support is also by BNY Mellon. I don’t count the co-branded Fidelity Visa by ELAN.

It is also worth mentioning that the majority of real banks and credit unions outsource essential functions to third party services. For example, Bank of America, Schwab Bank, NFCU and BECU, all use the same BillPay services by Fiserv (also used by Fidelity).

[ez_mode]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

How many of those issues were for newer accounts vs people with well established accounts?

Even the reddit threads seemed to indicate the issue was for newer accounts or people doing unusual transactions.

While I will not take the time to do a deep dive on the data breakout, it is not hard to find users with aged accounts getting shut down for no apparent reason: https://www.reddit.com/r/fidelityinvest ... s_blocked/

[ez_mode]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I agree, FIDELITY is NOT a BANK. Fidelity CMA is a brokerage account with cash management services. And for me it is a major selling point for Fidelity. Here are a few benefits that I enjoy:

- My money are in a money market fund that earns fair market rate minus expenses
- Auto liquidation of MMF with higher yields (FZDXX, FRSXX, FNSXX, etc)
- Robust security with authenticator app
- 24/7 US-based customer support
- All the features of premium bank account with zero fees and no requirements
- Usable online interface and mobile app

From my perspective, the only weak side of Fidelity cash management services is a debit card that is served by BNY Mellon and customer support is also by BNY Mellon. I don’t count the co-branded Fidelity Visa by ELAN.

It is also worth mentioning that the majority of real banks and credit unions outsource essential functions to third party services. For example, Bank of America, Schwab Bank, NFCU and BECU, all use the same BillPay services by Fiserv (also used by Fidelity).

Bill pay is one service and far from essential. Yes, most banks outsource bill pay, and bill pay is probably one of the least used services offered. Essential services are debit cards, ACH transfers, and, most importantly, FDIC coverage which every bank and credit union handles in house; Fidelity outsources all of it out because it has to by law.

And even the debit card which was managed by BNY Melon is now handled by a different bank as of a couple of weeks ago, and the transition caused issues for many users. With a real bank there is no need to worry about your card randomly ceasing to work because of a change in servicer.

[VictorStarr]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I agree, FIDELITY is NOT a BANK. Fidelity CMA is a brokerage account with cash management services. And for me it is a major selling point for Fidelity. Here are a few benefits that I enjoy:

- My money are in a money market fund that earns fair market rate minus expenses
- Auto liquidation of MMF with higher yields (FZDXX, FRSXX, FNSXX, etc)
- Robust security with authenticator app
- 24/7 US-based customer support
- All the features of premium bank account with zero fees and no requirements
- Usable online interface and mobile app

From my perspective, the only weak side of Fidelity cash management services is a debit card that is served by BNY Mellon and customer support is also by BNY Mellon. I don’t count the co-branded Fidelity Visa by ELAN.

It is also worth mentioning that the majority of real banks and credit unions outsource essential functions to third party services. For example, Bank of America, Schwab Bank, NFCU and BECU, all use the same BillPay services by Fiserv (also used by Fidelity).

Bill pay is one service and far from essential. Yes, most banks outsource bill pay, and bill pay is probably one of the least used services offered. Essential services are debit cards, ACH transfers, and, most importantly, FDIC coverage which every bank and credit union handles in house; Fidelity outsources all of it out because it has to by law.

And even the debit card which was managed by BNY Melon is now handled by a different bank as of a couple of weeks ago, and the transition caused issues for many users. With a real bank there is no need to worry about your card randomly ceasing to work because of a change in servicer.

I am not trying to convince you to use Fidelity CMA. There is no perfect financial institution, service or account. Each of us makes a decision based on the balance of features, benefits and drawbacks.

Many people keep their savings in low-interest savings accounts/CDs with to-big-to-fail banks. Others choose to use MMF, treasury bills, brokered CDs with brokerages.

Fidelity CMA is not an optimal choice for people looking for a familiar B&M bank with FDIC insurance. But Fidelity is a good match for financially literate clients that are comfortable with using brokerage and want to get a fair share of market return.

[Lastrun]

I moved to the One Stop Shop model over a year ago - couldn't be happier with the simplicity. However, was curious on opinions on this security risk.

I read a thread elsewhere that someone commented that having all your cash in a single place is a bad practice. They cited two reasons: getting locked out of your account OR the account getting drained for some reason.

I have a decent amount of cash - should I be keeping this elsewhere? Is centralizing it all in one place bad practice?

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

How many of those issues were for newer accounts vs people with well established accounts?

Even the reddit threads seemed to indicate the issue was for newer accounts or people doing unusual transactions.

While I will not take the time to do a deep dive on the data breakout, it is not hard to find users with aged accounts getting shut down for no apparent reason: https://www.reddit.com/r/fidelityinvest ... s_blocked/

yeah, but also easy to find the poster, for example, that deposited five $9,900 cashiers checks over 5 days, etc. Many of these have back stories. Reddit is the wild wild west, so not sure of how much I would rely on some meta data analysis of posts over there.

But I would make the observation that it appears Fidelity has amped up its algorithm or whatever, and long-time users are having locks and fraud reviews. Why do I say this——with complaint threads the Fidelity moderators have sort of three modes of reply:

1. Ignore it
2. Answer it specifically
3. Ask the poster to respond directly to the mods.

There gameplan on all these posts has shifted from using all three approaches, to just no. 1.

[ez_mode]

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

How many of those issues were for newer accounts vs people with well established accounts?

Even the reddit threads seemed to indicate the issue was for newer accounts or people doing unusual transactions.

While I will not take the time to do a deep dive on the data breakout, it is not hard to find users with aged accounts getting shut down for no apparent reason: https://www.reddit.com/r/fidelityinvest ... s_blocked/

yeah, but also easy to find the poster, for example, that deposited five $9,900 cashiers checks over 5 days, etc. Many of these have back stories. Reddit is the wild wild west, so not sure of how much I would rely on some meta data analysis of posts over there.

But I would make the observation that it appears Fidelity has amped up its algorithm or whatever, and long-time users are having locks and fraud reviews. Why do I say this——with complaint threads the Fidelity moderators have sort of three modes of reply:

1. Ignore it
2. Answer it specifically
3. Ask the poster to respond directly to the mods.

There gameplan on all these posts has shifted from using all three approaches, to just no. 1.

Yeah I am noticing a lack of response from Fidelity on the issue now. It seems like they went scorched earth mode to combat fraud, but they were not prepared. Step 1 was to lock a bunch of accounts, but it doesn’t seem like they have step 2 and on figured out yet and are now overwhelmed with complaints. Given Fidelity has a large social media presence and a vocal customer base, this was a pretty foolish move as the complaints are amplified. This whole episode has been a masterclass in how to not treat customers and deal with a crisis.

Chase was the primary target and they handled the situation with precision and quick action. Fidelity took a blanket approach. Schwab was allegedly targeted, too, and there hasn’t been a peep (yet) about adverse impacts on customers, leading me to believe their security is more comprehensive than Fidelity and extreme measures were not needed.

[classpro]

I have $0 in my CMA for at least a year and cash manager and use the CMA as main checking account. No issues yet

You almost certainly WILL have an issue if any withdrawal gets manually processed. If that never happens to you, then you're lucky. But why take the risk when you now know about it. It's a lot smarter to avoid the problem because Fidelity will blame it on you.

It is MUCH safer to keep adequate money in a money market fund in your cash management account rather than keeping funds in a money market fund in your brokerage account and using the cash manager to withdraw from your brokerage account. I don't see any benefit to using the cash manager, and I agree with others that there is some small benefit to not using it to keep larger sums in your brokerage account more isolated from potential fraud.

[ez_mode]

If you are happy with the simplicity of one stop shop, stick with it. Ignore this "real bank" nonsense. There are many people that have been using Fidelity cash management services for years without encountering any problems.

If you're concerned about security make a couple of changes:
- keep only 1-2 months of cash in your transactional account, move the rest to a different account
- as a backup, open Schwab brokerage and checking account and keep 1-2 months in MMF or ultrashort treasury ETF (eg SGOV) in a brokerage account.

You can fallback to Schwab accounts in case of a low probability event of your Fidelity account becoming unavailable for prolonged time.

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I agree, FIDELITY is NOT a BANK. Fidelity CMA is a brokerage account with cash management services. And for me it is a major selling point for Fidelity. Here are a few benefits that I enjoy:

- My money are in a money market fund that earns fair market rate minus expenses
- Auto liquidation of MMF with higher yields (FZDXX, FRSXX, FNSXX, etc)
- Robust security with authenticator app
- 24/7 US-based customer support
- All the features of premium bank account with zero fees and no requirements
- Usable online interface and mobile app

From my perspective, the only weak side of Fidelity cash management services is a debit card that is served by BNY Mellon and customer support is also by BNY Mellon. I don’t count the co-branded Fidelity Visa by ELAN.

It is also worth mentioning that the majority of real banks and credit unions outsource essential functions to third party services. For example, Bank of America, Schwab Bank, NFCU and BECU, all use the same BillPay services by Fiserv (also used by Fidelity).

Bill pay is one service and far from essential. Yes, most banks outsource bill pay, and bill pay is probably one of the least used services offered. Essential services are debit cards, ACH transfers, and, most importantly, FDIC coverage which every bank and credit union handles in house; Fidelity outsources all of it out because it has to by law.

And even the debit card which was managed by BNY Melon is now handled by a different bank as of a couple of weeks ago, and the transition caused issues for many users. With a real bank there is no need to worry about your card randomly ceasing to work because of a change in servicer.

I am not trying to convince you to use Fidelity CMA. There is no perfect financial institution, service or account. Each of us makes a decision based on the balance of features, benefits and drawbacks.

Many people keep their savings in low-interest savings accounts/CDs with to-big-to-fail banks. Others choose to use MMF, treasury bills, brokered CDs with brokerages.

Fidelity CMA is not an optimal choice for people looking for a familiar B&M bank with FDIC insurance. But Fidelity is a good match for financially literate clients that are comfortable with using brokerage and want to get a fair share of market return.

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

[tj]

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I agree, FIDELITY is NOT a BANK. Fidelity CMA is a brokerage account with cash management services. And for me it is a major selling point for Fidelity. Here are a few benefits that I enjoy:

- My money are in a money market fund that earns fair market rate minus expenses
- Auto liquidation of MMF with higher yields (FZDXX, FRSXX, FNSXX, etc)
- Robust security with authenticator app
- 24/7 US-based customer support
- All the features of premium bank account with zero fees and no requirements
- Usable online interface and mobile app

From my perspective, the only weak side of Fidelity cash management services is a debit card that is served by BNY Mellon and customer support is also by BNY Mellon. I don’t count the co-branded Fidelity Visa by ELAN.

It is also worth mentioning that the majority of real banks and credit unions outsource essential functions to third party services. For example, Bank of America, Schwab Bank, NFCU and BECU, all use the same BillPay services by Fiserv (also used by Fidelity).

Bill pay is one service and far from essential. Yes, most banks outsource bill pay, and bill pay is probably one of the least used services offered. Essential services are debit cards, ACH transfers, and, most importantly, FDIC coverage which every bank and credit union handles in house; Fidelity outsources all of it out because it has to by law.

And even the debit card which was managed by BNY Melon is now handled by a different bank as of a couple of weeks ago, and the transition caused issues for many users. With a real bank there is no need to worry about your card randomly ceasing to work because of a change in servicer.

I am not trying to convince you to use Fidelity CMA. There is no perfect financial institution, service or account. Each of us makes a decision based on the balance of features, benefits and drawbacks.

Many people keep their savings in low-interest savings accounts/CDs with to-big-to-fail banks. Others choose to use MMF, treasury bills, brokered CDs with brokerages.

Fidelity CMA is not an optimal choice for people looking for a familiar B&M bank with FDIC insurance. But Fidelity is a good match for financially literate clients that are comfortable with using brokerage and want to get a fair share of market return.

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

So are you going to use Schwab? They own their own bank.

[classpro]

Banks can have bad customer service too. I don't really see any difference between a bank and a brokerage firm. They are both handling other people's money, and have the same basic legal responsibilities to their customers. Fidelity had really good customer service until recently (they cut back on CS staff), and lately they've been very slow to respond. It's really hard to know what's going on with the recent reduction in check deposits. But I agree with others that they have handled this badly by not telling people what's going on in advance.

[ez_mode]

I agree, FIDELITY is NOT a BANK. Fidelity CMA is a brokerage account with cash management services. And for me it is a major selling point for Fidelity. Here are a few benefits that I enjoy:

- My money are in a money market fund that earns fair market rate minus expenses
- Auto liquidation of MMF with higher yields (FZDXX, FRSXX, FNSXX, etc)
- Robust security with authenticator app
- 24/7 US-based customer support
- All the features of premium bank account with zero fees and no requirements
- Usable online interface and mobile app

From my perspective, the only weak side of Fidelity cash management services is a debit card that is served by BNY Mellon and customer support is also by BNY Mellon. I don’t count the co-branded Fidelity Visa by ELAN.

It is also worth mentioning that the majority of real banks and credit unions outsource essential functions to third party services. For example, Bank of America, Schwab Bank, NFCU and BECU, all use the same BillPay services by Fiserv (also used by Fidelity).

Bill pay is one service and far from essential. Yes, most banks outsource bill pay, and bill pay is probably one of the least used services offered. Essential services are debit cards, ACH transfers, and, most importantly, FDIC coverage which every bank and credit union handles in house; Fidelity outsources all of it out because it has to by law.

And even the debit card which was managed by BNY Melon is now handled by a different bank as of a couple of weeks ago, and the transition caused issues for many users. With a real bank there is no need to worry about your card randomly ceasing to work because of a change in servicer.

I am not trying to convince you to use Fidelity CMA. There is no perfect financial institution, service or account. Each of us makes a decision based on the balance of features, benefits and drawbacks.

Many people keep their savings in low-interest savings accounts/CDs with to-big-to-fail banks. Others choose to use MMF, treasury bills, brokered CDs with brokerages.

Fidelity CMA is not an optimal choice for people looking for a familiar B&M bank with FDIC insurance. But Fidelity is a good match for financially literate clients that are comfortable with using brokerage and want to get a fair share of market return.

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

So are you going to use Schwab? They own their own bank.

I am. Making sure cash is invested is a minor inconvenience, but I feel much more comfortable with Schwab Bank handling my banking than I did with a Fidelity CMA.

[VictorStarr]

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money for long time (I may not read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

[ez_mode]

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money (I certainly didn’t read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

I'm not sure why you think Bogleheads, a niche community discussing a wide range of topics and definitely not Fidelity focused, would be a more relevant data source than the actual Fidelity subreddit operating by Fidelity itself with the sole purpose being to discuss Fidelity services. You can parse the number of complaint threads popping up by the hour and determine for yourself if the problem is an issue for you or not.

[VictorStarr]

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money (I certainly didn’t read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

I'm not sure why you think Bogleheads, a niche community discussing a wide range of topics and definitely not Fidelity focused, would be a more relevant data source than the actual Fidelity subreddit operating by Fidelity itself with the sole purpose being to discuss Fidelity services. You can parse the number of complaint threads popping up by the hour and determine for yourself if the problem is an issue for you or not.

Following your logic the appropriate place to discuss Fidelity services is “the actual Fidelity subreddit operating by Fidelity itself” (not "a niche community discussing a wide range of topics and definitely not Fidelity focused").

Good luck with your search for the Goldilocks bank account.

[ez_mode]

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money (I certainly didn’t read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

I'm not sure why you think Bogleheads, a niche community discussing a wide range of topics and definitely not Fidelity focused, would be a more relevant data source than the actual Fidelity subreddit operating by Fidelity itself with the sole purpose being to discuss Fidelity services. You can parse the number of complaint threads popping up by the hour and determine for yourself if the problem is an issue for you or not.

Following your logic the appropriate place to discuss Fidelity services is “the actual Fidelity subreddit operating by Fidelity itself” (not "a niche community discussing a wide range of topics and definitely not Fidelity focused").

Good luck with your search for the Goldilocks bank account.

There is no Goldilocks bank account but there are, luckily, actual bank accounts to choose from — something a CMA is not. Luckily my actual bank accounts at Schwab and Discover cover my needs with none of the risk that comes with fintech like Fidelity. But good luck, hopefully you aren’t caught up in Fidelity’s wide net of account closures and faltering customer service when you need them the most.

[tj]

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money (I certainly didn’t read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

I'm not sure why you think Bogleheads, a niche community discussing a wide range of topics and definitely not Fidelity focused, would be a more relevant data source than the actual Fidelity subreddit operating by Fidelity itself with the sole purpose being to discuss Fidelity services. You can parse the number of complaint threads popping up by the hour and determine for yourself if the problem is an issue for you or not.

Following your logic the appropriate place to discuss Fidelity services is “the actual Fidelity subreddit operating by Fidelity itself” (not "a niche community discussing a wide range of topics and definitely not Fidelity focused").

Good luck with your search for the Goldilocks bank account.

There is no Goldilocks bank account but there are, luckily, actual bank accounts to choose from — something a CMA is not. Luckily my actual bank accounts at Schwab and Discover cover my needs with none of the risk that comes with fintech like Fidelity. But good luck, hopefully you aren’t caught up in Fidelity’s wide net of account closures and faltering customer service when you need them the most.

The Fidelity CMA is not a Fintech and you're being dishonest when you compare it to a fintech. Fidelity has had the CMA for over 20 (30?) years

[VictorStarr]

Given the purpose of this thread is to help anyone considering using Fidelity as a one-stop-shop, it is important to not downplay the risks involved and the inherent nature of all fintechs/non-banks/neobanks.

Personally, I have went back and forth for a couple of years with using Fidelity as a bank. Just a few weeks ago I set up my paycheck to be direct deposited to my CMA and all of my credit cards to be paid out of it, but I had an uncomfortable feeling about it (and have in the past, too). I could not shake the nagging concern that I was taking on additional risk for a little gain in convenience.

All of my fears were confirmed in this recent episode of Fidelity using a rocket launcher when a scalpel could've been used to combat fraud. Fidelity's lack of transparency, lack of responses, lack of staff to handle the calls to unlock accounts, lack of any real rhyme or reason for the account locks and failed features, made me loss all confidence in them. I zeroed out my CMA and brokerage accounts, deleted all linked external accounts, and will let them auto-delete on their own from lack of activity.

Fraud has targeted Chase and other large banks, yet only fintech Fidelity is in the spotlight for responding in such an anti-consumer manner. Fidelity is protecting Fidelity at all cost; there is zero concern with customers and bills not being paid, losing access to money, and the stress of not having any clear direction on how, or even when, their accounts will be returned.

This is the risk that comes with a non-bank not owning its services and processes.

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money (I certainly didn’t read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

I'm not sure why you think Bogleheads, a niche community discussing a wide range of topics and definitely not Fidelity focused, would be a more relevant data source than the actual Fidelity subreddit operating by Fidelity itself with the sole purpose being to discuss Fidelity services. You can parse the number of complaint threads popping up by the hour and determine for yourself if the problem is an issue for you or not.

Following your logic the appropriate place to discuss Fidelity services is “the actual Fidelity subreddit operating by Fidelity itself” (not "a niche community discussing a wide range of topics and definitely not Fidelity focused").

Good luck with your search for the Goldilocks bank account.

There is no Goldilocks bank account but there are, luckily, actual bank accounts to choose from — something a CMA is not. Luckily my actual bank accounts at Schwab and Discover cover my needs with none of the risk that comes with fintech like Fidelity. But good luck, hopefully you aren’t caught up in Fidelity’s wide net of account closures and faltering customer service when you need them the most.

My financial well-being does not depend on any single account or institution. If one fails I always have a hot standby account ready to go.

[VictorStarr]

The Bogleheads Forum has more than 120,000 registered members. Around 5% (6,000) regularly use Fidelity for cash management services (see, Where do you bank and why? 2024 Edition, viewtopic.php?t=420669).

I expect that around 1% per year may have problem with Fidelity CMA and share their experience at this forum (one negative post a week, (6000 * 0.01)/52).

In the last couple of weeks I did not see a single post where an established client of Fidelity claimed that their accounts were blocked and they couldn't access their money (I certainly didn’t read all the posts).

Actually, this thread is almost six years old and I don’t recall many posts about locked accounts. Taking account that Fidelity CMA is very popular with churners that use it as a hub account (with elevated ACH activity), it is quite a reassuring statistic.

My numbers are rough estimates, feel free to plug your guesses and calculate the expected frequency of negative posts about Fidelity CMA.

I'm not sure why you think Bogleheads, a niche community discussing a wide range of topics and definitely not Fidelity focused, would be a more relevant data source than the actual Fidelity subreddit operating by Fidelity itself with the sole purpose being to discuss Fidelity services. You can parse the number of complaint threads popping up by the hour and determine for yourself if the problem is an issue for you or not.

Following your logic the appropriate place to discuss Fidelity services is “the actual Fidelity subreddit operating by Fidelity itself” (not "a niche community discussing a wide range of topics and definitely not Fidelity focused").

Good luck with your search for the Goldilocks bank account.

There is no Goldilocks bank account but there are, luckily, actual bank accounts to choose from — something a CMA is not. Luckily my actual bank accounts at Schwab and Discover cover my needs with none of the risk that comes with fintech like Fidelity. But good luck, hopefully you aren’t caught up in Fidelity’s wide net of account closures and faltering customer service when you need them the most.

The Fidelity CMA is not a Fintech and you're being dishonest when you compare it to a fintech. Fidelity has had the CMA for over 20 (30?) years

Whether Fidelity CMA is a fintech account or not is a technicality. The reality is that Fidelity provides reliable, secure and full featured cash management services for investors. If I trust Fidelity with my investments I can certainly trust Fidelity with my banking. My cash deposit's value is less than 1% of my investments.

[Pu239]

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I'm dealing with this problem right now. I made five check deposits at my local Fidelity office on Wednesday 9/11, received email deposit notices for each one on 9/12, then receiving a bill pay account cancelation email on 9/13. I immediately called Fidelity and spent over an hour on hold waiting to speak with an "outreach specialist". When connected to the specialist, he identified himself with the fraud unit and spent almost an hour asking me highly detailed and specific questions about just about every aspect of the checks I wrote, relationships with other banks, reasons for having other bank accounts, etc. Not only was my individual account being restricted for the check deposits but our joint major bill paying account was also under restriction which was not specified in the cancelation email related to my individual account. Funds for our current Federal estimated taxes are held in that account, which is particularly distressing. At the end of the call, he put me on hold to review my responses, then after a prolonged period, said that the account would remain under restriction pending further review. Hopefully, I will have resolution by tomorrow.

Even if account privileges are restored, I expect to leave Fidelity, not so much because of the fraud investigation, but because of other complicating factors related to the restriction which I don't have time to explain now. I'm preparing for a trip and should be able to report back in about a week. Besides, I'd rather have all the facts in order to properly assess the outcome and impact. Needless to say, the "Fidelity as a One Stop Shop" approach or any other one stop approach is no longer a possibility for us. If not for other accounts, we would temporarily be in a world of financial hurt.

[SnowBog]

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I'm dealing with this problem right now. I made five check deposits at my local Fidelity office on Wednesday 9/11, received email deposit notices for each one on 9/12, then receiving a bill pay account cancelation email on 9/13. I immediately called Fidelity and spent over an hour on hold waiting to speak with an "outreach specialist". When connected to the specialist, he identified himself with the fraud unit and spent almost an hour asking me highly detailed and specific questions about just about every aspect of the checks I wrote, relationships with other banks, reasons for having other bank accounts, etc. Not only was my individual account being restricted for the check deposits but our joint major bill paying account was also under restriction which was not specified in the cancelation email related to my individual account. Funds for our current Federal estimated taxes are held in that account, which is particularly distressing. At the end of the call, he put me on hold to review my responses, then after a prolonged period, said that the account would remain under restriction pending further review. Hopefully, I will have resolution by tomorrow.

Even if account privileges are restored, I expect to leave Fidelity, not so much because of the fraud investigation, but because of other complicating factors related to the restriction which I don't have time to explain now. I'm preparing for a trip and should be able to report back in about a week. Besides, I'd rather have all the facts in order to properly assess the outcome and impact. Needless to say, the "Fidelity as a One Stop Shop" approach or any other one stop approach is no longer a possibility for us. If not for other accounts, we would temporarily be in a world of financial hurt.

Sorry this is happening to you!

FWIW I found this in one of the posts in the Reddit link ez_mode shared. https://frankonfraud.com/fraud-trends/m ... ey-glitch/

From the sounds of it, Fidelity has recently seen a large increase in fraudulent activity - mostly through mobile check deposits. The article implied that this originally (or most recently) started out as fraudulent deposits made to Chase ATMs, but once Chace cracked down they shifted their target to Fidelity. The article implies that Fidelity's changes - including more aggressive actions locking accounts - are having an impact as attackers might by moving on to easier target.

As we rarely make check deposits, this seems unlikely to impact us directly. But I feel bad for people impacted.

[3000]

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I'm dealing with this problem right now. I made five check deposits at my local Fidelity office on Wednesday 9/11, received email deposit notices for each one on 9/12, then receiving a bill pay account cancelation email on 9/13. I immediately called Fidelity and spent over an hour on hold waiting to speak with an "outreach specialist". When connected to the specialist, he identified himself with the fraud unit and spent almost an hour asking me highly detailed and specific questions about just about every aspect of the checks I wrote, relationships with other banks, reasons for having other bank accounts, etc. Not only was my individual account being restricted for the check deposits but our joint major bill paying account was also under restriction which was not specified in the cancelation email related to my individual account. Funds for our current Federal estimated taxes are held in that account, which is particularly distressing. At the end of the call, he put me on hold to review my responses, then after a prolonged period, said that the account would remain under restriction pending further review. Hopefully, I will have resolution by tomorrow.

Even if account privileges are restored, I expect to leave Fidelity, not so much because of the fraud investigation, but because of other complicating factors related to the restriction which I don't have time to explain now. I'm preparing for a trip and should be able to report back in about a week. Besides, I'd rather have all the facts in order to properly assess the outcome and impact. Needless to say, the "Fidelity as a One Stop Shop" approach or any other one stop approach is no longer a possibility for us. If not for other accounts, we would temporarily be in a world of financial hurt.

Sorry this is happening to you!

FWIW I found this in one of the posts in the Reddit link ez_mode shared. https://frankonfraud.com/fraud-trends/m ... ey-glitch/

From the sounds of it, Fidelity has recently seen a large increase in fraudulent activity - mostly through mobile check deposits. The article implied that this originally (or most recently) started out as fraudulent deposits made to Chase ATMs, but once Chace cracked down they shifted their target to Fidelity. The article implies that Fidelity's changes - including more aggressive actions locking accounts - are having an impact as attackers might by moving on to easier target.

As we rarely make check deposits, this seems unlikely to impact us directly. But I feel bad for people impacted.

Hopefully this issue ends quickly. For now I think I’ll shift check deposits to checking account I have at another institution and when the funds are available move them to Fidelity.

[SnowBog]

Hopefully this issue ends quickly. For now I think I’ll shift check deposits to checking account I have at another institution and when the funds are available move them to Fidelity.

FWIW that was one of the recommendations I saw somewhere...

Presumably, the issue is more common with unknown payers - and poorly captured (aka bad image quality) checks.

The very few checks I deposit are usually reimbursements from places that I've received checks before. And I always ensure that the image quality is good (all text legible). So I'm not expecting those to have issues...

But it does give me pause for my child's youth account and random checks they might get from relatives. On the one hand, they rarely take money out (which seems to be the other side of the fraud) - so it might not flag anything. Likewise, given they don't actively use the account, even if it got locked it wouldn't impact them currently. But on the other hand, they are more likely to get unknown, personal, checks which might be more likely to flag activity...

But it seems like if this is a concern, it might be better to do the deposit elsewhere, and then transfer the fund in.

For clarity, IMHO this has nothing to do with Fidelity "not being a bank". As the article noted, Chace (a bank) was being hit by an increase in check fraud going through their ATM deposits. As they cracked down, attackers adapted and moved to Fidelity's mobile deposit. IMHO it wouldn't make any difference if Fidelity was - or wasn't - a bank. Attackers saw - and tried - to exploit things. Fidelity is reacting (similar to how Chace did before them), and seemingly succeeding, even if at times painfully so.

[3000]

For clarity, IMHO this has nothing to do with Fidelity "not being a bank". As the article noted, Chace (a bank) was being hit by an increase in check fraud going through their ATM deposits. As they cracked down, attackers adapted and moved to Fidelity's mobile deposit. IMHO it wouldn't make any difference if Fidelity was - or wasn't - a bank. Attackers saw - and tried - to exploit things. Fidelity is reacting (similar to how Chace did before them), and seemingly succeeding, even if at times painfully so.

I agree, this is more about deterring fraud than them not being a bank. Not because of this but because I would rather not deal with fraud on one of my Fidelity accounts I changed the way I do my banking. Besides by Roth IRA and taxable brokerage I have two CMAs. The primary one is for direct deposit, check deposit (as I said before I'm not going to deposit checks), and bill pay (Fidelity's bill pay). If I don't need to move money somewhere it just stays in the CMA. The second CMA is for ATM cash withdrawals and I keep a set amount in this account so if something was to happen to my debit card when it's unlocked only that amount is at risk. I also like that I know the amount in there can be withdrawn and I don't have to remember any transfers or bills pays, makes keeping track easier.

For check writing and other things that I would have to provide my checking account number out for (direct debit bill payment, tax refunds, linking another financial institution that would pull or push funds) I opened a free checking account at DCU (Digital Federal Credit Union). DCU currently offers 6.17% APY on their Primary Savings account on balances from $1 - $1,000 and 3.56% APY on their Advantage Savings account. So the amount I keep there will earn something.

The only thing DCU does not have is Zelle. That I get with my US Bank Smartly Checking account, the fee for this account is waived because I have a US Bank Cash+ credit card. I did not go with US Bank for my exposed checking account because the rules for the checking account fee wavier could change and DCU's savings rate were better.

[ez_mode]

Fintech as defined by Oxford Languages: computer programs and other technology used to support or enable banking and financial services.

Show me a bank or financial firm (or any other type of modern company for that matter) that doesn’t use computers to support their operations. By that definition everything is fintech now, it’s so broad a definition as to be useless.

Fidelity has been around for almost 80 years. The CMA may resemble products by fintech companies but that doesn’t make all of Fidelity’s accounts fintech, and I think it’s a mistake to try to lump all of Fidelity in with tech companies that just sprang up in the last couple of years who outsource everything and just put a web interface on other companies services. That’s not generally how Fidelity works AIUI.

The biggest issues with fintechs is lack of transparency and accounts being held in closure limbo for extended periods of time…sure sounds like recent Fidelity . From my vantage, Fidelity is not looking much different than Yotta right now. Different issues, same impact to the customer.

Read what the Fed Reserve has said about these non banks and please explain how Fidelity is different.

Some here keep confusing age of company with classification of company. If it makes you feel better that it’s an old company, that is a personal opinion, but that doesn’t move Fidelity out of the fintech realm. But you know that old saying about being entitled to opinions but not to your own facts…

[Lastrun]

....
The biggest issues with fintechs is lack of transparency and accounts being held in closure limbo for extended periods of time…sure sounds like recent Fidelity .

Um, read about how Alliant just randomly shuts down accounts after their annual meeting based on vague criteria. And this is not even a bank, it is a credit union, supposedly set up for the common man. https://www.doctorofcredit.com/alliant- ... -deposits/

There are over 1,000 complaints that come up in the CFPB database when I search the last 3 years for the terms "account/closed/without/notice" and limit that to checking and savings. The vast majority of these are banks. https://www.consumerfinance.gov/data-re ... c&tab=List

I don't see this as just a fintech or Fidelity issue.

[Gryphon]

Yotta got in trouble because they outsourced all their account management to a third party who were themselves another fintech company handing off the money to an actual bank. When the middleman fintech went belly up, Yotta had no idea where their customers money was because they weren’t keeping track of anything themselves.

I don’t see anything at Fidelity set up like that, not even the CMA is that convoluted.

[ez_mode]

The saga continues with more blocked accounts, now to include 401k accounts :

https://www.reddit.com/r/fidelityinvest ... or_reason/

https://www.reddit.com/r/fidelityinvest ... y_account/

[ez_mode]

I wouldn't call it nonsense. The issue is so prevalent that Fidelity itself has had to officially address a few weeks back (albeit by saying a whole lot of nothing).

Just peruse some of the account lock issues from the last year, it's a near hourly occurrence at this point: https://www.reddit.com/r/fidelityinvest ... 5e5&t=year

In the last week alone the number has skyrocketed supposedly in response to check fraud running rampant. Yet, you don't see Chase and actual banks taking the measures that Fidelity is taking by locking accounts, cancelling bill pay, shutting down debit card and ACH transactions -- all without notice and all to protect Fidelity, not the customer. And it's not just new users, it's users of various account ages and balances, Fidelity is taking draconian action across the board to cover themselves without regard for the customer. Go take a look at their reddit and see the countless posts about not being able to pay bills, transactions failing while at stores, and the inability to access accounts or get someone on the phone that can help.

Fidelity is not a bank.

I'm dealing with this problem right now. I made five check deposits at my local Fidelity office on Wednesday 9/11, received email deposit notices for each one on 9/12, then receiving a bill pay account cancelation email on 9/13. I immediately called Fidelity and spent over an hour on hold waiting to speak with an "outreach specialist". When connected to the specialist, he identified himself with the fraud unit and spent almost an hour asking me highly detailed and specific questions about just about every aspect of the checks I wrote, relationships with other banks, reasons for having other bank accounts, etc. Not only was my individual account being restricted for the check deposits but our joint major bill paying account was also under restriction which was not specified in the cancelation email related to my individual account. Funds for our current Federal estimated taxes are held in that account, which is particularly distressing. At the end of the call, he put me on hold to review my responses, then after a prolonged period, said that the account would remain under restriction pending further review. Hopefully, I will have resolution by tomorrow.

Even if account privileges are restored, I expect to leave Fidelity, not so much because of the fraud investigation, but because of other complicating factors related to the restriction which I don't have time to explain now. I'm preparing for a trip and should be able to report back in about a week. Besides, I'd rather have all the facts in order to properly assess the outcome and impact. Needless to say, the "Fidelity as a One Stop Shop" approach or any other one stop approach is no longer a possibility for us. If not for other accounts, we would temporarily be in a world of financial hurt.

Sorry to hear this is happening to you. Your experience mirrors that of numerous similar stories on Fidelity's subreddit, with the advantage of you being actually able to reach a fraud specialist. Others are reporting hour long waits, hang ups, and since the fraud team is only available during business hours on Mon-Fri that causes additional difficulties.

Once you verified your identity and nature of the checks, Fidelity should have immediately unfroze your account. Fidelity can check the legitimacy of the checks themselves very easily or simply have placed the funds on hold until the checks cleared, so none of their actions are making sense.

It sounds like amateur hour over at Fidelity. They either have no plan, or the plan was simply to shut down accounts with no thought into the next steps.

And with Fidelity CMA being a fintech product, a customer can't complain to the CFPB, OCC, or fed reserve. FINRA (a private company) will be of little help since this does not involve investing; it is banking features which is a no-man's land apparently when it comes to regulation. And this is the real threat and risk involved when dealing with fintech companies: the customer is left relying on the goodwill of the company to do the right thing with no recourse if the company does not. Some are comforted by Fidelity's age, but that means nothing. As if Lehman and Bear Sterns were not 100+ year old, storied companies. Fidelity has one objective: protecting Fidelity. They have proven they do not care about the customer with the level of customer "service" they've been dealing out lately for their self inflicted crisis.

[SnowBog]

Hopefully this issue ends quickly. For now I think I’ll shift check deposits to checking account I have at another institution and when the funds are available move them to Fidelity.

FWIW that was one of the recommendations I saw somewhere...

Presumably, the issue is more common with unknown payers - and poorly captured (aka bad image quality) checks.

The very few checks I deposit are usually reimbursements from places that I've received checks before. And I always ensure that the image quality is good (all text legible). So I'm not expecting those to have issues...

But it does give me pause for my child's youth account and random checks they might get from relatives. On the one hand, they rarely take money out (which seems to be the other side of the fraud) - so it might not flag anything. Likewise, given they don't actively use the account, even if it got locked it wouldn't impact them currently. But on the other hand, they are more likely to get unknown, personal, checks which might be more likely to flag activity...

But it seems like if this is a concern, it might be better to do the deposit elsewhere, and then transfer the fund in.

For clarity, IMHO this has nothing to do with Fidelity "not being a bank". As the article noted, Chace (a bank) was being hit by an increase in check fraud going through their ATM deposits. As they cracked down, attackers adapted and moved to Fidelity's mobile deposit. IMHO it wouldn't make any difference if Fidelity was - or wasn't - a bank. Attackers saw - and tried - to exploit things. Fidelity is reacting (similar to how Chace did before them), and seemingly succeeding, even if at times painfully so.

Or Fidelity's response (or lack thereof) is the main issue. They have thrown countless innocent users under the bus, whereas Chase, and other real banks, did not in response to the fraud. Why can Chase fix the problem quietly with minimal impacts, but Fidelity could not? Supposedly the fraudsters moved on to Schwab, but Schwab has seemingly not been impacted at all and Schwab apparently was able to shut it down without breaking a sweat much less breaking customers' accounts and trust.

If nothing else, this scenario has shown Fidelity's true colors and it is not a company I want to deal with and especially not use as a one-stop-shop.

I always find it interesting the different people can view the same thing differently...

For my two cents, I'm happy that Fidelity is cracking down and reacting to this attempted fraud. Again, I feel for people innocently caught up in this, and hope that they'll get sorted out correctly. And I get the frustration...

But I recognize that the attack against Fidelity is different than others, and thus the reaction needed to be different. The original Chase issue was with ATM deposits, which require physical access, likely have cameras to record activity, etc. With Fidelity, the issue was with mobile deposits, which could in theory be made anywhere in the world, with new or old accounts, and for more money by default than I think people realized. The response needed to be different.

The reality is crime, especially cyber crime, is a difficult thing to combat. And often the "innocents" get caught up in the middle. I doubt anyone "enjoys" doing MFA, but if a business "requires" it, we accept it as the reality we live in (and many of us proactively set it up, along with password managers for unique strong passwords, etc.).

In the same notion, if Fidelity didn't take this seriously, didn't respond aggressively, I personally wouldn't want to do business with them anymore. You (and others) seem to have the opposite impression. We are each entitled to our opinions. If you think the grass is greener elsewhere, I hope you find what you are looking for! For myself, I've yet to find anyone else that can offer me what Fidelity does. Are they prefect? Of course not - no one is. But they still exceed my needs.

[LadyGeek]

I removed a contentious post and reply regarding a member's favorable bias towards Fidelity. Opposing points of view are welcome. However, they must be done in factual, civil manner.

The points have been made, let's move on.

[popak]

How many of those issues were for newer accounts vs people with well established accounts?

Even the reddit threads seemed to indicate the issue was for newer accounts or people doing unusual transactions.

While I will not take the time to do a deep dive on the data breakout, it is not hard to find users with aged accounts getting shut down for no apparent reason: https://www.reddit.com/r/fidelityinvest ... s_blocked/

Yeah, we have had accounts with Fidelity for years and our taxable brokerage account (not CMA) was restricted. Couldn't even purchase securities in the account or transfer cash to another Fidelity account. Called the Private Client Group number but they couldn't do anything and told us to call the Fraud department during Eastern business hours. Waited 90 minutes on hold followed by 30 minutes of interrogation by the rep asking questions about random transactions. We had no mobile deposits, so that was not the trigger. In the end, the rep said it seemed like a false positive and unrestricted our account. But he did say it would take an overnight cycle for us to be able to withdraw or transfer any money (and it did). We were lucky and the issue was resolved after a few hours on the phone but more recent lockouts seem to have been going on for a lot longer. If this had happened to our CMA with rejected bill payments, it would have been a beyond gigantic nightmare.

We are 95% one-stop-shop users with our 401(k)s, 529, HSA, taxable brokerage, CMA, and kids' Youth accounts all with Fidelity. Did that a few years back to make things simpler for my wife. Used to keep a month of expenses in our local credit union account as backup. After this episode, I have increased the balances in the credit union account to 6 months of expenses, just in case our Fidelity account is locked for weeks (like has been reported by some users on Reddit).

Until Fidelity gets their act together (and probably even after that), that is going to be our standard operating procedure to ensure not all eggs are in one basket, especially for critical and time-sensitive payments like mortgage, credit card, and utility bills. The CMA is still the primary for paying all those bills but the moment it is locked, we're prepared to pay the bills out of the credit union account. We're okay losing a little bit of simplicity and some earned interest for the reduced stress and hassle.

[Pu239]

With Fidelity, the issue was with mobile deposits, which could in theory be made anywhere in the world, with new or old accounts, and for more money by default than I think people realized. The response needed to be different.

Well, not quite true. I physically walked into my local Fidelity branch office with checks written by me for accounts that I own and personally handed them to a Fidelity representative for deposit. The deposits ranged from $250 to $3000. I followed Fidelity's instructions on the deposit slip to make the checks payable to "Fidelity Brokerage Services". I've had this account for almost 2 years. In short, I made what I thought were routine deposits into a well established account. I don't use mobile banking, don't have the app on my phone and, for that matter, have never used mobile banking with any bank, brokerage or company at any time in my long life, yet I still experienced the shutdown. I told the fraud rep that all of the checks were valid deposits from various accounts that I own and expected that verification, similar to what happens with a credit card fraud investigation, to resolve Fidelity's concerns. It didn't and I'm still waiting for a resolution. I've had different types of Fidelity accounts dating, on and off, back to the 1990s and previously never had any problems. A long relationship history doesn't seem to matter in this case. After my long talk with the fraud rep, I'm not feeling confident their approach will root out only the fraudsters. There will be collateral damage to perfectly honest customers.

[need403bhelp]

I have $0 in my CMA for at least a year and cash manager and use the CMA as main checking account. No issues yet

You almost certainly WILL have an issue if any withdrawal gets manually processed. If that never happens to you, then you're lucky. But why take the risk when you now know about it. It's a lot smarter to avoid the problem because Fidelity will blame it on you.

It is MUCH safer to keep adequate money in a money market fund in your cash management account rather than keeping funds in a money market fund in your brokerage account and using the cash manager to withdraw from your brokerage account. I don't see any benefit to using the cash manager, and I agree with others that there is some small benefit to not using it to keep larger sums in your brokerage account more isolated from potential fraud.

Can you give a specific example of a transaction that is manually processed? I don’t know what that means although I clearly haven’t had one

[Lastrun]

I have $0 in my CMA for at least a year and cash manager and use the CMA as main checking account. No issues yet

You almost certainly WILL have an issue if any withdrawal gets manually processed. If that never happens to you, then you're lucky. But why take the risk when you now know about it. It's a lot smarter to avoid the problem because Fidelity will blame it on you.

It is MUCH safer to keep adequate money in a money market fund in your cash management account rather than keeping funds in a money market fund in your brokerage account and using the cash manager to withdraw from your brokerage account. I don't see any benefit to using the cash manager, and I agree with others that there is some small benefit to not using it to keep larger sums in your brokerage account more isolated from potential fraud.

Can you give a specific example of a transaction that is manually processed? I don’t know what that means although I clearly haven’t had one

There was a recent post here or on Reddit and I cannot find it. Gist of post after poster had numerous conversations with Fidelity to determine what happened——poster had zero or low balance in CMA and was relying on auto-liquidation or overdraft rules to cover. Check hit that could not be machine read and it was MANUALLY processed at that point by Fidelity (much to my surprise) and rejected due to balance, the auto-liquidation or overdraft never kicked in, the manual processor only saw insufficient funds.

Does anyone else recall this issue?

[VictorStarr]

I have $0 in my CMA for at least a year and cash manager and use the CMA as main checking account. No issues yet

You almost certainly WILL have an issue if any withdrawal gets manually processed. If that never happens to you, then you're lucky. But why take the risk when you now know about it. It's a lot smarter to avoid the problem because Fidelity will blame it on you.

It is MUCH safer to keep adequate money in a money market fund in your cash management account rather than keeping funds in a money market fund in your brokerage account and using the cash manager to withdraw from your brokerage account. I don't see any benefit to using the cash manager, and I agree with others that there is some small benefit to not using it to keep larger sums in your brokerage account more isolated from potential fraud.

Can you give a specific example of a transaction that is manually processed? I don’t know what that means although I clearly haven’t had one

There was a recent post here or on Reddit and I cannot find it. Gist of post after poster had numerous conversations with Fidelity to determine what happened——poster had zero or low balance in CMA and was relying on auto-liquidation or overdraft rules to cover. Check hit that could not be machine read and it was MANUALLY processed at that point by Fidelity (much to my surprise) and rejected due to balance, the auto-liquidation or overdraft never kicked in, the manual processor only saw insufficient funds.

Does anyone else recall this issue?

It’s the first result of
https://www.google.com/search?q=fidelit ... eheads.org

[SnowBog]

With Fidelity, the issue was with mobile deposits, which could in theory be made anywhere in the world, with new or old accounts, and for more money by default than I think people realized. The response needed to be different.

Well, not quite true. I physically walked into my local Fidelity branch office with checks written by me for accounts that I own and personally handed them to a Fidelity representative for deposit. The deposits ranged from $250 to $3000. I followed Fidelity's instructions on the deposit slip to make the checks payable to "Fidelity Brokerage Services". I've had this account for almost 2 years. In short, I made what I thought were routine deposits into a well established account. I don't use mobile banking, don't have the app on my phone and, for that matter, have never used mobile banking with any bank, brokerage or company at any time in my long life, yet I still experienced the shutdown. I told the fraud rep that all of the checks were valid deposits from various accounts that I own and expected that verification, similar to what happens with a credit card fraud investigation, to resolve Fidelity's concerns. It didn't and I'm still waiting for a resolution. I've had different types of Fidelity accounts dating, on and off, back to the 1990s and previously never had any problems. A long relationship history doesn't seem to matter in this case. After my long talk with the fraud rep, I'm not feeling confident their approach will root out only the fraudsters. There will be collateral damage to perfectly honest customers.

OK, more generically the attacks are check fraud. Many are via mobile deposits, but fundamentally is check fraud.

And unfortunately the attacks aren't only on new accounts. The article I linked earlier mentioned that attackers were offering to split any illegal gains 50/50 if people would grant them access to their accounts.

In other words, the attackers aren't exclusively showing up with new accounts named "ihax4lulz". They are intentionally trying to "hide" as "normal users making normal transactions".

So unfortunately, you are correct, perfectly honest customers are going to be collateral damage.

I'm not sure what Fidelity can do that's drastically different. They are clearly responding to a massive increase in attacks. Personally, I'm glad they are responding and taking action to protect things. That's what I want to see from my financial institutions.

And they can't exactly be "transparent." If they told you what/why your account was flagged, attackers would use that intel to adapt and avoid doing "those" things. Much like apparently they've already evolved beyond limiting attacks to mobile deposits...

So I get the frustration. I'm sure Fidelity could be doing certain things "better". But the cause of this isn't Fidelity, it's the criminals who are attacking Fidelity and putting the rest of us in jeopardy. If there was a prefect solution for things like this, I've yet to see it... But I'd rather work with an organization that takes security seriously, even at the risk of inconveniencing me at times. Just my two cents...

[manlymatt83]

For check writing and other things that I would have to provide my checking account number out for (direct debit bill payment, tax refunds, linking another financial institution that would pull or push funds) I opened a free checking account at DCU (Digital Federal Credit Union). DCU currently offers 6.17% APY on their Primary Savings account on balances from $1 - $1,000 and 3.56% APY on their Advantage Savings account. So the amount I keep there will earn something.

The only thing DCU does not have is Zelle. That I get with my US Bank Smartly Checking account, the fee for this account is waived because I have a US Bank Cash+ credit card. I did not go with US Bank for my exposed checking account because the rules for the checking account fee wavier could change and DCU's savings rate were better.

Has the customer service at DCU gotten any better? Supposedly it was awful during Covid.

[3000]

For check writing and other things that I would have to provide my checking account number out for (direct debit bill payment, tax refunds, linking another financial institution that would pull or push funds) I opened a free checking account at DCU (Digital Federal Credit Union). DCU currently offers 6.17% APY on their Primary Savings account on balances from $1 - $1,000 and 3.56% APY on their Advantage Savings account. So the amount I keep there will earn something.

The only thing DCU does not have is Zelle. That I get with my US Bank Smartly Checking account, the fee for this account is waived because I have a US Bank Cash+ credit card. I did not go with US Bank for my exposed checking account because the rules for the checking account fee wavier could change and DCU's savings rate were better.

Has the customer service at DCU gotten any better? Supposedly it was awful during Covid.

The only contact I had with customer service was the membership department asking me to unfreeze my TransUnion credit report. I did and told them I had through their secure application site and about an hour later I received my welcome information.

If you are going to pull money into the CU there is a 5 business day hold to be aware of. Money pushed to the CU is available immediately.

[Pu239]

The article I linked earlier mentioned that attackers were offering to split any illegal gains 50/50 if people would grant them access to their accounts.

In other words, the attackers aren't exclusively showing up with new accounts named "ihax4lulz". They are intentionally trying to "hide" as "normal users making normal transactions".

It's making more sense now because the fraud rep asked me if I ever share my log-in details with anyone including my wife (I don't). He said the review would take about 48 hours which I took to mean 48 business hours ending at COB tomorrow. I don't mind the delay provided they complete the review in a reasonable amount of time. And I completely understand the reason and support Fidelity's right to investigate suspicious accounts. They know they are likely to lose accounts as a result. I'm not, however, convinced that Fidelity is faultless since such a concentrated attack is presumably focused on a weakness within Fidelity's system. My concern is related less with the fraud investigation than it is with their flawed and erroneous account notification and restriction measures which I'll explain in detail at a later date. Basically, after receiving 3 emails (all delayed by many hours) stating that the available balance on my account was zero (due to the lock) and transactions were not being allowed, two transactions happened anyway during the lock period resulting with funds leaving the account. I had authorized these transactions with another bank prior to the account restriction but the emails explicitly said they would not occur. What good is an account restriction if it fails to do its job? I intend to ask Fidelity about this assuming my accounts aren't permanently canceled and I ever speak with the fraud rep again. Just another day in the life...

[LazyFinanceJunkie]

Looks like I may have sparked a bit of a debate here - really appreciate it.

For me, I carry enough cash that I went ahead and moved a couple months of expenses to my secondary HYSA. It’s enough peace of mind that if something wacky happens with Fidelity I can float my life for a couple of months. It’s a negligible change for significant peace of mind.

[SnowBog]

I'm not, however, convinced that Fidelity is faultless since such a concentrated attack is presumably focused on a weakness within Fidelity's system.

If you haven't, recommend watching "Catch me if you can". Check fraud has been around forever. And I'm not exactly sure there was a specific "weakness" that's been exploited...

But I'd agree that Fidelity isn't entirely faultless... Again, check fraud has been around since about the time that checks were invented. My eyes dropped when I saw the default limits allowed for checks deposited at Fidelity. Especially given that Fidelity generally let's people use (at least trade) those funds before they fully clear. (My experience is you still needed to wait for them to clear before they could be withdrawn, but maybe that wasn't always the case...)

If that's the weakness - then minimally Fidelity was "tempting fate" with such generous policies. Maybe this was a "security through obscurity" situation, where few people (or at least few criminals) were aware of and attempting to exploit their generous policies.

And again, those of us innocent people will likely see reductions as a result. I would be shocked if the default allowed check deposit amount isn't vastly lowered (sounds like that's already happened for some).

My concern is related less with the fraud investigation than it is with their flawed and erroneous account notification and restriction measures...

Definitely can understand the frustration on being told one thing and seeing something else happen. Not sure that's unique to Fidelity, and definitely not unique to this situation. Heck, I've seen this within my own employer/company.

But this is one of my pet peeves as well. And one I'd like to see all companies be better at!

[rich126]

Looks like I may have sparked a bit of a debate here - really appreciate it.

For me, I carry enough cash that I went ahead and moved a couple months of expenses to my secondary HYSA. It’s enough peace of mind that if something wacky happens with Fidelity I can float my life for a couple of months. It’s a negligible change for significant peace of mind.

I've always been a believe not to put all your eggs in one basket. Most of my money is divided between Fidelity and Schwab. I also have some in the government's TSP retirement account. I've never understood people who have a single account, single credit card, single ATM card, etc.

Years ago I was trying to get gas when I was working out of state and my card was not getting approved. I found out later that the bank had put a hold on it because I shipped a computer to the state I was working in and not the state I was living in. Easily fixed but it required a phone call and this was pre-cellphone days.

When I had a Wells Fargo account I got some email indicating my account balance was zero which didn't make sense to me but it was getting late so I went to sleep. While it was fixed by the next morning, anyone who only had a WF ATM/Debit card and needed to use it would have had issues. Turned out the problem was something involving the bill payment software that would cycle through until your account reached zero (something like that, this happened 10+ years ago).

I had a relative who was affected by the Savings and Loan problems a long time ago (40 years ago?) and it took a good year or more before he got his money back.

For all those reasons I make sure to have at least 2 of everything. I understand people wanting to "simplify" things but when things go wrong, the simplification can be costly and stressful.

[SteveInNJ]

The article I linked earlier mentioned that attackers were offering to split any illegal gains 50/50 if people would grant them access to their accounts.

In other words, the attackers aren't exclusively showing up with new accounts named "ihax4lulz". They are intentionally trying to "hide" as "normal users making normal transactions".

It's making more sense now because the fraud rep asked me if I ever share my log-in details with anyone including my wife (I don't). He said the review would take about 48 hours which I took to mean 48 business hours ending at COB tomorrow. I don't mind the delay provided they complete the review in a reasonable amount of time. And I completely understand the reason and support Fidelity's right to investigate suspicious accounts. They know they are likely to lose accounts as a result. I'm not, however, convinced that Fidelity is faultless since such a concentrated attack is presumably focused on a weakness within Fidelity's system. My concern is related less with the fraud investigation than it is with their flawed and erroneous account notification and restriction measures which I'll explain in detail at a later date. Basically, after receiving 3 emails (all delayed by many hours) stating that the available balance on my account was zero (due to the lock) and transactions were not being allowed, two transactions happened anyway during the lock period resulting with funds leaving the account. I had authorized these transactions with another bank prior to the account restriction but the emails explicitly said they would not occur. What good is an account restriction if it fails to do its job? I intend to ask Fidelity about this assuming my accounts aren't permanently canceled and I ever speak with the fraud rep again. Just another day in the life...

I don't know the details of the attack, but it seems like the weakness in the system is that our financial system still relies on little pieces of paper that we hand write an IOU on... How we're still using these in 2024 is beyond me.

https://youtu.be/dCyvmuLbbpQ?si=l69IBuZh_tVZrJwe&t=61

[ez_mode]

Fidelity's official (non) response to account closures and locks: https://www.reddit.com/r/fidelityinvest ... t_account/

Basically, they will lock your account at their discretion, claim it's due to suspicion of fraud (even though it seems the majority of these cases have nothing to do with fraud), and everyone should just trust their "system" (a system that is proven to be deeply flawed, trigger happy, and Fidelity employees themselves do not seem to understand).

This is directly related to using Fidelity as a one-stop-shop, and raises apparent risks involved with using this company for any banking features.

[Lyrrad]

Fidelity's official (non) response to account closures and locks: https://www.reddit.com/r/fidelityinvest ... t_account/

Basically, they will lock your account at their discretion, claim it's due to suspicion of fraud (even though it seems the majority of these cases have nothing to do with fraud), and everyone should just trust their "system" (a system that is proven to be deeply flawed, trigger happy, and Fidelity employees themselves do not seem to understand).

This is directly related to using Fidelity as a one-stop-shop, and raises apparent risks involved with using this company for any banking features.

This seems to be a risk with any financial institution. Unfortunately, it's difficult to figure out if it's more likely to happen at Fidelity compared with another institution.

For example, here's a New York Times story from last year about this happening at banks. With large banks, you can complain to the CFPB or the Office of the Comptroller of the Currency, though the regulatory/escalation path for Fidelity is less clear to me.

I assume there's a small risk of losing access to my funds temporarily at any large institution. I keep funds at multiple institutions, and keep records so that I can easily switch my primary current account on short notice.

[lstone19]

Basically, they will lock your account at their discretion, claim it's due to suspicion of fraud (even though it seems the majority of these cases have nothing to do with fraud), and everyone should just trust their "system" (a system that is proven to be deeply flawed, trigger happy, and Fidelity employees themselves do not seem to understand).

This is directly related to using Fidelity as a one-stop-shop, and raises apparent risks involved with using this company for any banking features.

It does seem like an over-reaction by Fidelity. Fidelity has always been very conservative (which is probably why you don't seem them supporting Zelle and similar) but based on the reports (for which people are likely not reporting all the details), it seems to be an excessive reaction. If they aren't sure about a mobile deposit, they should just block those funds. But instead, it's sounding like they lock the entire account. OTOH, when I read some of the stuff on Reddit, it's clear that many people still don't get that banking is not really a real-time system and they incorrectly expect to be able to do things immediately.

My concern is that if I do anything outside my normal pattern, they'll consider it suspicious and lock the account. I'm not concerned (yet) to start moving stuff (we have adequate assets elsewhere although it would be a problem with all the stuff on auto-pay pulling from the CMA) but all I can say is I hope Fidelity is prepared to lose customers they really shouldn't want to lose. For ourselves, if they ever lock us out, it will be game over with Fidelity. Once the issue is resolved, everything will be moved elsewhere and we will never do business with them again.

[EnjoyIt]

Does a one time poor interaction with an institution automatically define all future interactions will be bad and we should run to do business elsewhere? Personally, I don’t think so.


Personally, I would rather an institution be over zealous about protecting against fraud vs too lax and put my money at risk. From personal experience, when fraud does occur, it takes far longer than sitting on hold for 1-2 hours and a couple of business days to have everything rectified.

[GaryA505]

Maybe someone should start a thread, "Schwab as a one stop shop". Or maybe there is one.

EDIT: I found it:
viewtopic.php?t=287311