I’m a bit of an angry consumer at the moment, so bear with me.

My wife (surprise, I’m married!) and I just purchased a new home together! We closed last Wednesday. In anticipation of this, we transferred about $350,000 into a joint Fidelity cash management account. We did this transfer 9 days before close of escrow. Generally ACH payments take about 2-3 days to clear, so we had oceans of time (by the standards of stressful real estate purchases anyway). The day before closed, we logged in to Fidelity to wire the money to escrow and we see that the money is not available, in fact it won’t be until 11/28 over 2 weeks after close. Uh oh!

We call them and they say due to an increase in fraud in the industry (not our account, just generally in the world) they’ve increased the hold time on deposits to SIXTEEN BUSINESS DAYS which is over 3 weeks. They apparently have done this without notice to their customers. This 16 day hold is nowhere I can see on their website (it still says 1-3 days).

We ended up being able to close by using another source of money and calling my own fancy special rich guy rep to eventually transfer the intended funds, but it’s still not fully resolved. We have about $50K in our joint checking account we use to pay bills and that is currently showing an available balance of $0 meaning we can’t access any of the money for another 10 days!

For what it’s worth, we are EXTREMELY fortunate because we have money and fancy rich guy reps. But this could be devastating to those depending on that money to eat.

Fidelity has said on the phone (to me and others) this is a temporary measure. It seems to impact only some cash management accounts and deposits made by ACH or check. Direct deposit and wire transfers should not be impacted.

I’ve recommended Fidelity cash management accounts in the past (unsponsored of course), but this makes me partially regret it. You may want to keep banking with a bank.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy