vu8 wrote: ↑Tue Jul 20, 2021 11:46 pm
DSInvestor wrote: ↑Tue Jul 20, 2021 11:40 pm
I believe you are looking at a delay before Fidelity will allow you to withdraw that money that you deposited by ACH. That money should be available to trade sooner than that.
I believe Vanguard has similar restrictions.
Yes you are right, the funds that I was questioning for was indeed available for trade, but not for withdrawal. However it is still a long wait for the cash that the investor has just deposited
to be available to be withdrawn.
But you aren't depositing cash. You are doing an ACH transfer which generally takes three to four business days to clear.
On Monday you make an ACH transfer request. The first business day (Tuesday) when the transfer is initiated. Then, the Receiving Depository Financial Institutions (RDFI) has 48 hours from the time the ACH transaction was originated in order to notify Fidelity of any return codes (Thursday). Then if no return codes are pulled by the end of that period, the funds associated with the ACH debit are considered "settled" and are made available the following business day (Friday in this case).
These are rules established by NACHA and are common to ACH transfers between financial institutions. Some exceptions are made for certain "same-day" available ACH credits, such as payroll Direct Deposits. Eventually ACH transfers between accounts owned by the same customer may fall under that umbrella but currently most of those ACH transfers are subject to the current rules on fund availability on the first business day after settlement by RDFI.
Fidelity lets you trade with the funds immediately because they can reverse the trade if the funds do not clear (and while you can trade, you cannot sell and withdraw the proceeds before the ACH transfer clears to skirt that hold period). If you have a more immediate need for the funds then you should either initiate the ACH transfer ahead of time, withdraw the funds or pay your bills directly from your other financial institution, or open a Fidelity cash management account and use that in addition to, or in lieu of, your other financial institution.