I made a Treasury Mistake

[MichealKnight]

Not sure if I'm posting this as a confession with desire to be tarred and feathered - but here goes.

A few days ago I put in an order on Treasury Direct (this after 3 attempts to logon). I wanted to put $100,000 in a 26 week bill. Ok, cool.

And this has *never* happened to me before.

So today I go to look at the site, give my holdings a once over and guess what - seems I put in an order for.... 1,000,000 - - yes, that's right - I added a zero. It's rather - uh - meaningful zero.

Tried to cancel it as the issue date is TOMORROW but status says "auctioned" and I don't see a button or option to cancel.

So i did "contact us" sent the pertinent info to them on their site in an email.

The bank account I use to fund it has a whopping $140k in it - so i'l be $860k short. So now I wonder:

*Will they go to take the money - and only grab $140? Will they not be able to find $1 mill and therefore cancel the order? OR am I on the hook for additional $860,000 for 6 months.

 

[Dash man]

That’s one big “oops!”
I have no idea how they’ll handle it, but they may suspend your account too. Let us know what happens.

ETA: You may want to notify your bank.

 

[Fermion]

wow that is quite the fat finger!

One time I bought 10,000 shares of Microsoft instead of 1000 shares, but that was back when it was $25 and I sold them immediately for a couple dollars profit.

 

[DJRR]

See, we warned you all this market timing and trading would lead to doom

I always have to remind my self: I don't want 10,000 bonds, I want 10 bonds for $10,000.

I am sure it has happened many times so it will work out, but with current lack of customer service employees it may take a while to get to someone with a brain. Maybe a reason to buy via a brokerage account? I am pretty sure Fidelity would stop me from processing that transaction.

 

[MichealKnight]

Day Trader!!!!!!!!

wow that is quite the fat finger!

One time I bought 10,000 shares of Microsoft instead of 1000 shares, but that was back when it was $25 and I sold them immediately for a couple dollars profit.

Now now what would the Bogles say

 

[MichealKnight]

Yep

See, we warned you all this market timing and trading would lead to doom

I always have to remind my self: I don't want 10,000 bonds, I want 10 bonds for $10,000.

I am sure it has happened many times so it will work out, but with current lack of customer service employees it may take a while to get to someone with a brain. Maybe a reason to buy via a brokerage account? I am pretty sure Fidelity would stop me from processing that transaction.

Yes, on hold with Discover bank now.

I will certainly - for learning purposes write back whatever the outcome is, whenever that is. Was sort of embarrassing saying this to a live person Even if I wanted to get the cash together - no way I can get it transferred and valid by tomorrow. In the end I'm hoping suspension is worse case scenario and then just use Wife's account. It's not like I was trying to evade a tax or take anything etc.

 

[38Chevy454]

Can you transfer all but $1 from the bank account? That way the entire sale would be not be able to fund. It may cause you some grief with your Treasury account as mentioned. But if no money, then I see it as a potential deadbeat buyer situation.

 

[latexman]

So today I go to look at the site, give my holdings a once over and guess what - seems I put in an order for.... 1,000,000 - - yes, that's right - I added a zero. It's rather - uh - meaningful zero.

BUMMER, man!

 

[MichealKnight]

Bank

Can you transfer all but $1 from the bank account? That way the entire sale would be not be able to fund. It may cause you some grief with your Treasury account as mentioned. But if no money, then I see it as a potential deadbeat buyer situation.

Discover Bank phone folks are so far helpful. Best they could suggest is putting a freeze on the account.

I figured I'm gonna be in hot water with Treasury Direct...... I'd rather be in hot water knowing the $140k in my Discover account is frozen.

 

[Car-Guy]

Joe may send someone to collect.

Seriously, I hope they don't treat it as a bad check... I'm sure your not the first person that's had that happen.

 

[Chuckanut]

I would think a brokerage house would warn us if we tried to buy more $$' worth of CD or bonds than we have in our trading account.

But, how would the FRB know how much a person has in their bank account until they try to get at the money? Hopefully, they will cancel the sale and simply send you a somewhat harshly worded email. I doubt if it's the first time this has happened.

 

[MichaelB]

This question is addressed at the help section of Treasure Direct. https://www.treasurydirect.gov/indiv/help/treasurydirect-help/faq/

What happens if I don't have enough funds in my bank account or C of I to cover a security purchase?

On the issue date of a Treasury marketable security, TreasuryDirect debits your financial institution or your C of I, depending on which payment source you choose, and the security is issued in your TreasuryDirect account. If your financial institution returns the debit due to insufficient funds (which may take several days), the security will be removed from your account and no further attempt to collect the funds will be made. The Bureau of the Fiscal Service is not responsible for any fees your financial institution may charge relating to returned ACH debits.

Better check with the bank there’s no overdraft protection …

 

[MichealKnight]

Well

Thanks to all for replies.

Thanks MichaelB admin for reply too - - I guess you found that Googling. I tried that - it would take me to the Treasury site and it would say something like "this site is not available" or something like that.

As I said I emailed Treasury.

I called Treasury and it was like an answering machine at the movie theater in the 80's. The guy said "if you get this message during business hours it means we've stopped taking calls for the day" Jovial sounding chap.

To be safe Discover Bank says they've put a 'freeze' on the account. They've been great on phone - they said they'll waive any overdraft charge if it were to happen - that was before we decided to freeze.

Ugh.

Don't know if I deserve a slap to the back of my head - or a Whopper with Cheese at this point.

 

[MarieIG]

I really don't think Discover would go that far for overdraft protection - and I doubt "fat fingering" is that unusual.

Not with Treasury Direct, but I recently put in for a fund transfer from the wrong bank to my brokerage. The linked accounts are lined up one underneath the other, and I clicked on the one which is supposed to receive funds instead of the one which was supposed to send the funds. The bank just sent me an e-mail that it would not be depositing the funds into the brokerage - because they weren't there - thank you for being a customer and have a nice day. (There was no charge.)

The brokerage charged me a $25 fee, which I called up and have them waive.

 

[MarieIG]

I would think a brokerage house would warn us if we tried to buy more $$' worth of CD or bonds than we have in our trading account.

But, how would the FRB know how much a person has in their bank account until they try to get at the money? Hopefully, they will cancel the sale and simply send you a somewhat harshly worded email. I doubt if it's the first time this has happened.

- They would reject the trade.

- They would not know what you have in your bank but there would be a hold on what you can take out of the account until your funds clear.

 

[Sunset]

Joe may send someone to collect.

Seriously, I hope they don't treat it as a bad check... I'm sure your not the first person that's had that happen.

I can attest to that, as just a few days ago I put in an order for $1,000,000 CD.
Thankfully the brokerage site popped up a warning message saying they limit purchases to $250,000 the FDIC limit on CD's.

 

[Spock]

I have repeated mild heart attacks when getting bond trade confirmation texts from Fidelity. When I buy qty=50 $1000 CDs total=50K, I get a msg from the app saying I bought 50,000 CDs. First time it happened I panic called Fidelity and they said "yeah it's confusing that it does that". My thought it's the 21st century, you have the technology to fix software unit of measure problems.

 

[MichaelB]

Thanks MichaelB admin for reply too - - I guess you found that Googling. I tried that - it would take me to the Treasury site and it would say something like "this site is not available" or something like that.

I didn’t use the Google, just went to Treasury Direct web site help section.

Don't know if I deserve a slap to the back of my head - or a Whopper with Cheese at this point.

Neither. In the bigger scheme of things, this one is mostly harmless and a good learning experience.

 

[EastWest Gal]

I found this in the FAQ section that MichaelB linked, under "Purchasing Treasury Marketable Securities":

"On the issue date of a Treasury marketable security, TreasuryDirect debits your financial institution or your C of I, depending on which payment source you choose, and the security is issued in your TreasuryDirect account. If your financial institution returns the debit due to insufficient funds (which may take several days), the security will be removed from your account and no further attempt to collect the funds will be made. The Bureau of the Fiscal Service is not responsible for any fees your financial institution may charge relating to returned ACH debits."

It sounds like the problem is between you and your bank, and Treasury Direct will merely remove the securities from you account.

BTW, I wanted to purchase another I Bond, and I logged into Treasury Direct, but it said it was unavailable. I'm not locked out. And they aren't taking phone calls any more today because of the call volume.

 

[Dash man]

BTW, I wanted to purchase another I Bond, and I logged into Treasury Direct, but it said it was unavailable. I'm not locked out. And they aren't taking phone calls any more today because of the call volume.

There’s a glitch in there system from the recent website update that is probably causing havoc.

 

[EastWest Gal]

I thought of that, but how can you tell?

 

[jldavid47]

I would think a brokerage house would warn us if we tried to buy more $$' worth of CD or bonds than we have in our trading account.

Schwab, in fact, does that. If I put in a bond trade for more than I have available in cash, in my taxable account I get a warning that I do not have enough settled cash and that I may be charged margin interest if I continue. In my IRA I'm simply not allowed to place the trade. I'd be willing to bet other brokerage firms do the same.

 

[audreyh1]

FWIW I only use Treasury Direct to purchase and redeem IBonds.

For Treasury auctions I order though my broker.

 

[MichealKnight]

Cheers!

See, we warned you all this market timing and trading would lead to doom

I always have to remind my self: I don't want 10,000 bonds, I want 10 bonds for $10,000.

I am sure it has happened many times so it will work out, but with current lack of customer service employees it may take a while to get to someone with a brain. Maybe a reason to buy via a brokerage account? I am pretty sure Fidelity would stop me from processing that transaction.

Hee hee!!!! I knew that one would come. Well played, well played.

 

[MichaelB]

For Treasury auctions I order though my broker.

There’s no downside to that, right?