Fidelity locking down tons of CMA accounts due to possible fraud

[MichaelB]

I view my readily available funds as not likely to earn interest.

I have a few hundred in cash at home, as I nearly always use CC's it seems to just sit unused, with 0% interest.

Use an ally online account as a bank, it pays 4.2% for the savings account. So keep maybe $10K there as a backup. More if they have a good paying CD (they have low penalties for breaking various ones).

I also have a brick and mortar bank and yes it pays 0% for the checking account, so I only keep $8K -> $10K in there and use it to pay my CC bills, etc. I transfer in money every couple of months or as needed from a brokerage account.

One of my separate banks is a high yield savings account. It pays a decent rate, not always the highest rate, but sometimes it is the highest. I only keep about a month’s worth of spending in checking.

At the beginning of each year I move at least 2/3 of the year expected spending to this savings account. The remainder is often invested in short-term CDs.

In an emergency I could also pull some from IBonds.

This is what I need to do. I’ve been keeping the cash account in our Vanguard money market, but a separate high yield bank account is the way to go.

 

[ncbill]

Unrelated to this fraud & locking up of the Fidelity CMAs.

I IMAGINED IF, a big IF

Fidelity( or any other Bank/Broker) locked up our accounts &

I did not have access to any of our accounts & money what would I do ? That is all we have in retirement & there is no new money coming in.

What would or could I do ??

Fidelity is a great broker to be with & I think it does all in its power to keep security its number one priority. We have been very happy with Fidelity.

We have not been affected by this CMA restrictions.

A Fidelity CMA shouldn't have much in it at all...just what is required for bill pay & other routine transactions.

The majority of assets should be kept in a brokerage account, with manual transfers to the CMA as needed.

Though I currently use external accounts for routine transactions.

I was going to open a CMA, but will wait until this all gets sorted.

 

[5Miler]

DGF and I have largely kept separate accounts in the 31 years we have been together. She has all of her investment accounts at Fidelity, a brick and mortar local checking account, a credit union for whatever reason and we share a joint checking account at USAA for household expenses.

I keep all of my investment accounts at Vanguard except my small after tax brokerage account at Schwab plus the shared joint account at USAA.

We both now fund our B&M checking accounts largely via SS deposits with monthly automated transfers from each of us to the USAA household account. We pay all household expenses from there including utilities, lawn/pest services, taxes, insurance and most household appliance repairs/replacements. In all the years with that account, we have never had to supplement our monthly transfers although we have increased deposits a few times to account for changes in our spending. I consider it an escrow account for household expenses.

I have looked at streamlining our process a bit but always conclude we are happy with our current situation since automatic transfers and bill pays cover the majority of our regularly scheduled needs and if we can't access any account at all, that's not the biggest issue we will be facing.

The big downside is the lack of interest earned on our USAA checking balance but it never exceeds $10K especially this year with 2 refrigerators replaced and $1800 in tree services for lumpy expenses. I paid for the new AC system last week myself.

 

[Happyras]

We have a few CMA accounts at Fido, along with our trust brokerage accounts, IRA's and UTMA accounts. Without notice (which disturbs me a bit) Fido has limited our remote deposits into CMA's to $1000/day. However, not a big deal, as we can deposit checks up to $500K remote to our other accounts. Someone mentioned not to do overdraft on these CMA accounts. I believe I need to remove that feature to be sure.

We maintain an on-line Marcus account, a B&M bank and a B&M Credit Union. The later for additional ATM access while traveling without Foreign fees. I do like to have my debit cards for a few CMA accounts available for travel withdrawals, but I keep those balances low while out of the country. Tough world out there.....

For us, the current issues with FIDO CMA's is not a big deal at this time.

 

[euro]

I use a Fidelity CMA for all normal banking functions. I've seen no change in the normal flow of funds in and out. I use mobile check deposit once per month to deposit a recurring check. I deposited the check a few days ago and the funds were available the next day. I just checked and my daily check deposit limit is $500K, same as always. Nothing to see here.

Pretty much the same for me. No issues at all

 

[tulak]

I’ve been trying to consolidate, but this thread is a good reminder to not over-consolidate. I think I’ll stick with at least two major institutions that have a decent yield that I can draw from if needed.

But I wonder if I had issues with Fidelity, would going to a branch office solve the problem?

For example, they lock my account and I need money. If I show up with proper ID/documentation, will they be able to help, either by transferring funds to a previously linked account or some other means?

 

[RetiredHappy]

I’ve been trying to consolidate, but this thread is a good reminder to not over-consolidate. I think I’ll stick with at least two major institutions that have a decent yield that I can draw from if needed.

But I wonder if I had issues with Fidelity, would going to a branch office solve the problem?

For example, they lock my account and I need money. If I show up with proper ID/documentation, will they be able to help, either by transferring funds to a previously linked account or some other means?

From my experience, local Fidelity offices are very good. We travelled out of state and we were in Monterey and an issue came up with some paperwork for MYGA and Fidelity had rejected the transfer because of vague language on the form from the MYGA insurer. We went to the local Fidelity office and managed to change the form and witnessed by the Fidelity branch manager and it was resubmitted. We didn't even need to make an appointment and they took very good care of us. The whole time they said that our FA back home (Private Client - we don't pay for managed funds) would be kept apprised of everything.

 

[meleana]

This seems to have been happening since they were down a week or so ago. People are complaining that their accounts are being locked or the funds will not be available until October and of course they're not happy.
It's so bad that Fidelity has created a thread to try and contain all the complaints in one place..

https://www.reddit.com/r/fidelityinvestments/comments/1fj85a8/megathread_addressing_your_questions_about

What’s CMA? I hate when people use abbreviations.

 

[audreyh1]

Cash management account.

 

[jazz4cash]

What’s CMA? I hate when people use abbreviations.

Cash Management Account at Fidelity popular to use in lieu of a checking account.

 

[mebden]

How I have myself setup is 3 accounts 1 brokerage account, 1 online bank account giving me a 5% interest rate for the so-called rainy-day money and with 1 brick & Mortar bank as my checking account to pay all my bills. I have online access with all accounts and keep very little in checking till bills need paying. I transfer from online bank or brokerage and most transfers completed that day if done early in morning and if not for sure money will be there the next day. So always keep my money working for me as long as I can. I think Warren Buffet told me that you need to make money while you sleep so it works for me LOL

 

[WeeWilly]

I have an HSA account at Fido. I made a $1000 EFT into it recently (note, not a check) and discovered the deposit was locked up. I called up Fidelity and talked to a rep who sounded legitimately surprised that my transaction would fall under this new waiting period rule. He informed me that my money wouldn’t be accessible for almost 3 weeks from the day of deposit. Not pleased.

 

[audreyh1]

Wow, bummer! Did you pull it? This is the situation where pushing from the other institution might have made the difference.

 

[WeeWilly]

Fortunately I didn’t need access to the funds immediately, but you make a valid point about getting my bank involved to get the funds freed up.

 

[jazz4cash]

I really like Fidelity, but this has shaken my confidence in relying on them. I have had zero problems and suspect that I am exempt from these issues based on long standing relationship and I generally don't need immediate access to deposited funds. What shakes my confidence is the very poor communication from Fidelity. I understand how sensitive the fraud issue is but they have exacerbated it by a lack of communication. A statement along the lines of "we are temporarily increasing security to protect all parties" and notifying clients before they make deposits would go a long way.

 

[Katoslake]

Fidelity locked down my MIL’s CMA account today. Message said account had been closed. Money could be transferred out of the account, but no trades could be made, including buying a new CD. She wasn’t trying to move money out, just buy a CD.
To reopen a call had to be made to Fidelity.
Her daughter called ( she has POA) and was told Fidelity needed a new W9 and copy of SS card on file. Rep said it was “flagged in the back by the fraud department”. She’s had the same account for two years. Over 2 hours on the phone. Maybe resolved in 3 business days.
She may decide to totally move her accounts.

 

[audreyh1]

Bummer!

 

[braumeister]

I've been a Fidelity customer for 27 years and never had a problem, only good service.
But I still keep 10-15% of my money elsewhere, just in case.

 

[RetiredAndLovingIt]

Fidelity locked down my MIL’s CMA account today. Message said account had been closed. Money could be transferred out of the account, but no trades could be made, including buying a new CD. She wasn’t trying to move money out, just buy a CD.
To reopen a call had to be made to Fidelity.
Her daughter called ( she has POA) and was told Fidelity needed a new W9 and copy of SS card on file. Rep said it was “flagged in the back by the fraud department”. She’s had the same account for two years. Over 2 hours on the phone. Maybe resolved in 3 business days.
She may decide to totally move her

Fidelity locked down my MIL’s CMA account today. Message said account had been closed. Money could be transferred out of the account, but no trades could be made, including buying a new CD. She wasn’t trying to move money out, just buy a CD.
To reopen a call had to be made to Fidelity.
Her daughter called ( she has POA) and was told Fidelity needed a new W9 and copy of SS card on file. Rep said it was “flagged in the back by the fraud department”. She’s had the same account for two years. Over 2 hours on the phone. Maybe resolved in 3 business days.
She may decide to totally move her accounts.

My original post was about three weeks ago and they don't seem to have a handle on the problem. I just checked this morning and there are also complaints about Fidelity checks being returned to sender and Fidelity acknowledges this is an issue on 401K accounts. This particular complaint is very concerning.

https://www.reddit.com/r/fidelityinvestments/comments/1fye60s/no_one_will_take_my_complaint_seriously

 

[audreyh1]

Fidelity locked down my MIL’s CMA account today. Message said account had been closed. Money could be transferred out of the account, but no trades could be made, including buying a new CD. She wasn’t trying to move money out, just buy a CD.
To reopen a call had to be made to Fidelity.
Her daughter called ( she has POA) and was told Fidelity needed a new W9 and copy of SS card on file. Rep said it was “flagged in the back by the fraud department”. She’s had the same account for two years. Over 2 hours on the phone. Maybe resolved in 3 business days.
She may decide to totally move her accounts.

That’s really odd that she could take money out but not buy anything. I guess because they closed her account? Well hopefully they get it reopened.

 

[Al18]

If it was my MIL who got her CMA closed, I would walk down to her local Fidelity office to find out what happened and determine the alternatives. I know you can buy a CD with a Fidelity brokerage account and make money transfers.

 

[explanade]

How is a CMA account different than a standard brokerage account?

 

[audreyh1]

How is a CMA account different than a standard brokerage account?

It has a wrapper for FDIC insured deposits using program banks. Otherwise it works like a regular brokerage account.

I think they were initially targeted by fraudsters because they had very high mobile deposit limits.