Withdraw Money from Brokerage Account
Early this week, I mentioned in one of my posts that I am in the process of transferring money out of Scottrade account. Since it’s the first time for me to withdraw money, I had to set up checking writing and apply for a Visa check card so I can use them whenever I want to move money out of the brokerage account. After the post was published, I got this comment from SavingEverything:
That’s the major disadvantage of scottrade, and why so many people I’ve heard do not give them business. I’m suprised you gave them business with such a big disadvantage and time consuming event to get your funds when you need them! Even if you write a check, you then have to deal with your own bank’s schedule of availability of funds for checks that are usually considered non-local. Other brokers online have allow etf and usually the money is in your bank account 2 days after.
For all these years, no ACH withdrawal has never been an issue to me because I never needed to withdraw money, so I didn’t realize it’s a disadvantage. And one of the reasons that I give them my business is that Scottrade is the only broker, among all those I have account with, that allows me to use money transferred into the account via Money Direct (also an electronic money transfer system) on the same day to buy stocks price above $4.00. As far as I know, all other brokers will hold the money for a few days, from 3 to 5, before it can be used to trade stocks. Since I don’t always plan ahead what I want to buy, there usually isn’t much money in the account ready to purchase stocks. In this regard, Scottrade is better than any others, though it’s also the most expensive broker, in terms of commission.
Now go back to withdrawing money. Scottrade does offer a few ways to withdraw fund from the account, such as check and wire, plus check writing/check card, but not ACH. What about other brokers?
TradeKing is my second largest broker. In addition to wire ($20 fee) and check withdraw, it does offer ACH transfer from the brokerage account to bank account. However, while ACH may be the preferred method for fund transfer, TradeKing certainly doesn’t make it convenient because of restrictions it imposes on such transaction:
Online ACH transactions are limited to a maximum of $10,000 per day. ACH deposits are subject to a trading hold of 5 business days and must remain in the account for a minimum of 10 business days before withdrawal.
It looks like there’s a maximum of 15 days hold period. In my opinion, this is not the best option to withdraw money from TradeKing account.
With OptionsHouse, funds can be withdrawn in check, wire, or ACH transfer. The cost for wire transfer is $15 for domestic while check and ACH withdrawal are free of charge. There’s no mention of any hold period for ACH transfer out of the account, but I would imagine that the fund from selling stocks has to be settled before it can be moved out. For withdrawing funds that are deposited using ACH, there’s a 5-day hold period though.
Firstrade supports ACH fund transfer in both directions as well, along with check and wire withdrawal ($30 fee). I have used ACH to fund my account before, but not the other direction. On its website, it only says that ACH fund withdrawal is subject to a $30,000 per transfer limit and $50,000 combined limit in 5 business days. There’s no information on ACH hold period.
In addition to check, wire ($15 fee), ACH transfer, optionsXpress also supports checking writing for account balance of at least $5,000, the same as Scottrade does. But it has to be set up first. For ACH withdrawal, the transfer request will be processed the same day for settled fund if the request is received 12:00 PM EST. The website doesn’t mention explicitly any ACH hold period though.
Finally, Zecco. Like brokers mentioned above, Zecco also supports three methods to withdraw funds from the account, by check, wire, or ACH transfer. From my account, it seems that the process is rather straightforward once bank link has been established. The wire transfer fee is also quite low, at $15 for domestic transfer. However, I did hear somebody mentioned about their not so-pleasant experience when trying to move money out of Zecco account a couple of years ago. Not sure if that’s still the case.
Well, after going through all my brokerage accounts, it seems that Scottrade is the only one that doesn’t support ACH transfer, which is kind of weird since they already allow ACH transfer (using Money Direct) to move money into the account. This is on top of another thing that I don’t understand Scottrade: It doesn’t allow dividend reinvestment while everybody else seems to offer it for free. Hope Scottrade will add these services soon, so I can use it even more
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