Hassle linking accounts to send ACH transfers

[Tracer]

I recall when transferring funds via ACH between banks first became a thing. You list you account and routing number, they send the other institution a micro trial deposit, you wait a day of two to verify the amounts, your linked account then becomes active and you can start making transfers. This can be done between any bank, credit union or brokerage in the US as long as you have the account and routing number.

It seems today some financial institutions are turning to third party companies like Plaid and others to handle their transfers. When this method works, your linked account is verified instantly. No waiting to verify trial deposits. Sounds great. The problem is they don't always work. It requires your counterparties to allow the verifier to log in via their bank. Some institutions do not participate and the provider does not have full coverage across all the banks where the trial deposit method does.

At least in my case this has been frustrating. I have funds at different institutions and do a lot of transferring to move funds to my checking account to cover bills, move money to send a Zelle payment to someone, move funds that were direct deposited into a low interest account to a HYSA or move money to my local bank if I need cash at an ATM. Some of these accounts I cannot link directly because of the reasons mentioned so I find myself doing financial gymnastics to get the funds where they need to go by transferring to one account, then from there to another. I don't know if anyone else is experiencing this problem, but for someone who does a lot of transferring like me it's annoying.
Okay.. I'm done venting.

 

[braumeister]

It seems today some financial institutions are turning to third party companies like Plaid and others to handle their transfers.

I haven't heard of this, and I just linked a couple of accounts the other day, the standard way.
Maybe it's just smaller financial institutions? Can you let us know which one(s) you found doing this?

 

[MichaelB]

Plaid authenticates users and carries out transfers and is used by some large banks and financial service businesses. I would rather a large bank do its own authentication but apparently they (Chase, WF, BoA, etc) prefer Plaid. I don’t understand why and wonder if there is a liability issue somewhere. Problems with old computer code may also be a driver of this.

There has been a real increase in FinTech intermediaries, and most are behind the scenes. We only find out of their existence and role when there’s been a breach or failure.

 

[cathy63]

Yes, it's annoying. I can do push transactions from my credit union checking account to Chase but I can't initiate any transaction from the Chase side. I can't link the CU account to Fidelity at all. So to fund our HSA accounts I have to push money from the CU to Chase and then pull it from Fidelity's side to get it into the correct accounts.

The CU also won't do Zelle and Zelle's limiting itself to its partner banks starting soon, so I'm debating just closing the CU account and switching to a more connected bank.

 

[audreyh1]

Fortunately when I used Plaid (to pay for a car) it linked to BofA perfectly and I got my BofA login plus a 2FA to be able to log in that way. I was delighted.

So, I guess you have to review banks and their restrictions.

I have been able to link Fidelity to three different CUs, and push or pull no problem. In general I initiate all transfers from Fidelity, whether push or pull.

 

[braumeister]

I can't link the CU account to Fidelity at all.

I wonder why? I transfer between my CU and my Fidelity CMA all the time.

 

[TheWizard]

I'd be annoyed in the OP's situation and would look for a simpler way to manage things.
In my case, my only bank account is my CU checking account, to which my various retirement income streams come.

I do pull transactions to pay my CC BALANCES and to move excess $$ to my Vanguard taxable account, where it is available "immediately" to buy ETFs with.

I maintain a decent balance in that checking account so the only times I've had to transfer $$ from Vanguard back into checking is for infrequent new car purchases.

So I'm a happy camper...

 

[rk911]

We have accounts in 3 retail banks.

- Bank 1 cannot send to or receive from Bank 2. Bank 1 says it's Bank 2's problem and vice-versa.
- Bank 2 can send to and receive from Bank 3.
- Bank 3 can send to and pull from Bank 1 but Bank 1 has very low daily limits if I want to initiate a txfr from Bank 1. Therefore all txfr activity for Bank 1 is initiated on the Bank 3 side.

We'd dump bank 1 in a heartbeat except all of our usual monthly bills are auto-debited and our SS and pension checks are auto-deposited. Re-creating all of that would be tedious.

 

[rodi]

Yes, it's annoying. I can do push transactions from my credit union checking account to Chase but I can't initiate any transaction from the Chase side. I can't link the CU account to Fidelity at all. So to fund our HSA accounts I have to push money from the CU to Chase and then pull it from Fidelity's side to get it into the correct accounts.

The CU also won't do Zelle and Zelle's limiting itself to its partner banks starting soon, so I'm debating just closing the CU account and switching to a more connected bank.

San Diego County Credit Union? SDCCU somehow keeps getting highest rating of San Diego credit unions- but they charge for billpay, they aren't friendly about transfers, don't offer medallion... The only thing keeping me with an account there is that we have a safe deposit box there.

 

[rk911]

The only thing keeping me with an account there is that we have a safe deposit box there.

That's one of the reasons we've stayed with Bank #1 (see post #8). But that bank discintinued their vault boxes and switched to 'Lobby Boxes'...locked boxes but in the bank's lobby. We closed out that box last month and are now looking for a small, fire-resistant home safe for important papers.

 

[cathy63]

I wonder why? I transfer between my CU and my Fidelity CMA all the time.

It's this specific CU. I know lots of others are fine. The error is that Fidelity can't verify that the names on the accounts match. The reason they can't verify is because the CU doesn't have a way for outside institutions to verify automatically. They only want to do the two small random deposits method and Fidelity won't do that.

San Diego County Credit Union? SDCCU somehow keeps getting highest rating of San Diego credit unions- but they charge for billpay, they aren't friendly about transfers, don't offer medallion... The only thing keeping me with an account there is that we have a safe deposit box there.

No, it's Meriwest, which used to be Pacific IBM Employees FCU. I've had an account there for 40 years now, so it's mainly inertia that's kept me from moving. They don't have branches here, but we do have a Chase account if we need a physical location.

I was thinking about switching to Mission Federal CU. They're on Zelle's list, while SDCCU is not. I also thought about Navy Fed, which I know a lot of people like, but it's somewhat of a hassle to get the proof that I'm eligible, so Mission is probably the easiest choice.

 

[wrigley]

I wonder why? I transfer between my CU and my Fidelity CMA all the time.

Same here.

 

[Sunset]

I've run into the verification thing once where they asked to use plaid, and I didn't want to. I did find fairly hidden the old way on the site to do it.

Should I ever run into this again, I'll be sure to look, and search on their site for the 'old' way of 2 deposits.
I don't want to give login credentials to some 3rd party.

 

[euro]

It's an issue for me too and so, I juggle funds between several accounts to get them to the right place. Annoying, but doable. I'm used to it and know which paths to take, but I'm worried about my DW having to figure it out if I should get incapacitated. An additional complications is that the different institutions have different dollar limits and some even have fees that need to be taken into account....

 

[Texas Proud]

Who owns Plaid? If it is the big banks that tells you something...

I closed out my CU account last year... I hardly ever used them anymore but they USED to have good deals on cars etc. so kept an account there... well, they decided to charge $6 per month fee for all of these 'benefits' that we would be getting... I went in to ask and there was no way you could be 'free' anymore...

I asked... had been a member for 44 years...

 

[audreyh1]

I've run into the verification thing once where they asked to use plaid, and I didn't want to. I did find fairly hidden the old way on the site to do it.

Should I ever run into this again, I'll be sure to look, and search on their site for the 'old' way of 2 deposits.
I don't want to give login credentials to some 3rd party.

Plaid had me select my bank and then sent me to my bank web user interface. The bank verified it was me via 2FA as if I were logging in from a new device. I did not enter login credentials to Plaid.

 

[Tracer]

On a side and somewhat positive note, it seems "pushing" funds out of a Fidelity account to a linked external bank is done at lightning speed. I've initiated transfers at 8:30 AM and the funds are already deposited and available to withdraw at the receiving bank by noon the same day. That's wire transfer speed and free to boot.

 

[audreyh1]

Yes, some of my banks show funds received and available a few hours later. Others show the next day. It depends on the receiving bank.

 

[badatmath]

I haven't heard of this, and I just linked a couple of accounts the other day, the standard way.
Maybe it's just smaller financial institutions? Can you let us know which one(s) you found doing this?

I was about to say that BOA does not do the transfer micro amounts thing. . . if they use plaid IDK. I had no issue.

I was surprised when a smaller place did the micro transaction recently because I assumed the way above was "normal".

The differences in transfer limits and cut off times and processing speeds is a bit annoying to me. I have waited 4 business days for ACH to show up.

I've never had anything same day. . .

 

[teej1985]

San Diego County Credit Union? SDCCU somehow keeps getting highest rating of San Diego credit unions- but they charge for billpay, they aren't friendly about transfers, don't offer medallion... The only thing keeping me with an account there is that we have a safe deposit box there.

I always thought bill pay is the one thing that banks and CUs probably could charge for that people would pay for the convenience of not having the hassle of mailing checks. I didn't know there were some that actually do charge.

 

[TheWizard]

I always thought bill pay is the one thing that banks and CUs probably could charge for that people would pay for the convenience of not having the hassle of mailing checks. I didn't know there were some that actually do charge.

I never saw the charm in using bill pay from my CU.
Mainly because my CU doesn't know the amount due to each of my accounts.
So I'd have to spend an additional ten seconds typing that in each month, per account. And that's assuming that the various accounts that I have are remembered by the bill pay service.

Much more fun to have my various accounts PULL payments from my CU instead...

 

[teej1985]

I never saw the charm in using bill pay from my CU.
Mainly because my CU doesn't know the amount due to each of my accounts.
So I'd have to spend an additional ten seconds typing that in each month, per account. And that's assuming that the various accounts that I have are remembered by the bill pay service.

Much more fun to have my various accounts PULL payments from my CU instead...

Your checks didn't know how much to send when you sent them in the mail either.

I switched to auto pay within the past couple years ago as well, but used bill pay from 2010-2022ish..

 

[TheWizard]

Your checks didn't know how much to send when you sent them in the mail either.

I switched to auto pay within the past couple years ago as well, but used bill pay from 2010-2022ish..

Entirely true regarding paper checks a few decades ago.
But I/we am talking the present now.
I could use auto pay on my CCs but choose instead to pay off the BALANCE twice a month. Easily done on my smartphone with a few taps of my thumb...

 

[2cheap2eat]

I don't trust putting in my login info on Plaid (or similar sites), I rather do the old method and wait for the micro deposits. Once done, there isn't anything else to do. I also use Fidelity cash management account to move move around, it's faster than bank to bank ACH transfers.

 

[Route246]

I wonder why? I transfer between my CU and my Fidelity CMA all the time.

I just went through ACH hell when I was trying to move funds around between brokerages and banks in preparation for making a large wire transfer to the escrow company's bank.

First, a matter of scale. Things change when you move $100 to $500/$1000 and when you want to move many $1000's. ACH is the most straightforward, however every bank sets its own limits and they also set policies for sending and receiving. The micro transfers worked well in the past but many are moving away from there. There must be a reason but not sure why.

Second, what works for one account to another account does not mean it works that way for any other connection attempting to be established, even in the same institution. There must be internal turf wars or something but same bank to another already linked bank caused me nothing but pain to try to get a different account at same target bank linked.

I have free wires and ACH transfers at all of my banks and brokerages due to average daily balance, etc. It doesn't matter one bit. There are more corner cases than corners if you get my drift. I told the seller's agent I needed 30 days to close even though we had all of the assets available. I wasn't really doing anything difficult, it is just that some of the money moved was in the few hundreds, some in the few thousands or ten thousands and one near $2M. I did not have any cash ready because I was not going to trigger any taxable events until we were under contract, for obvious reasons. It was quite ugly and taxing to make sure the funds all showed up for the final week before closing. Although settlement times for selling securities is usually a few days I found out I couldn't transfer on margin for some strange reason and pay a few days interest. This delayed things further as a few wires got cancelled because of this. It was three brokerages and one destination bank account (Schwab Bank, if that matters). What could be easier than this? I sold multiple blocks of stock because I needed the basis itemized for my 1099 and the brokerages advised letting something settle before placing the next trade. Fair enough, I did that, but it was not as smooth as I expected for various reasons.

I recall multiple times calling the brokerages and asking something to the effect of "Where is my money? or What happened to this trade? or Why isn't the funds in the settlement account now?" That said, everything did converge at about the 25 day mark and I felt comfortable that I would get the money wired into the escrow bank within the 30 day target with a day to spare. Silly me. The wire (a little under $4M) got held up by fraud detection. This after an early morning call to Schwab bank on a recorded line that the wire would go through without issues at noon that day. To say I was livid is an understatment. At about 1PM I called to my personal valet broker and asked her "What's up with my wire? It was due to go out at 12 Noon today and I have that confirmation on a recorded line." Silence on the line that was deafening for a short amount of time and she confessed that the wire did not go out and will have to go out tomorrow. She explained that fraud detection tried to call me at 11:58AM and couldn't get through. I was in a meeting and had do not disturb on my phone. So, fraud detection held up my wire. I remained calm and told her that this is unacceptable and I expect you to do an investigation and send me a report as to why this will never ever happen again for any customer. If I don't hear back this all goes to social media, the usual places with many high net worth readers and I will not hold back. I let her know that perhaps a routine bank to bank transfer is OK but when it is for an escrow wire your fraud detection needs to move heaven and earth to get that wire done. I told her I prepped it 28 hours earlier and there was plenty of time to check. I told her your firm needs to take the risk at that point if they are a 2-minutes to go and you can't decide. This is not acceptable, I must have repeated that sentence ten times. I remained calm and collected, never raised my voice, never used any language I would regret.

Long story short, yes, I needed 30 days to close even though I had all of the assets in place. Setting up these connections takes time and I thought I had all of them setup. Silly me, again. I needed the 30 days, I figured I could do it in 15 days but I was very wrong about that, too. There was a total of 14 trades that needed to happen, many could be done on the same day. Again, silly me. I thought I had this planned, rehearsed and staged to happen very smoothly. Near the end I was happy I asked for 30 days as I needed all 30 days, not the 29 I thought I needed near the end. Talk about coming down to the wire. Whew.

You might ask why I waited to make the trades. The thing is, with real estate deals like this I needed to be under contract before I committed to paying over $1.2M in LTCG taxes. All of those decades-long tax deferrals were finally coming home to roost, the feds and state must be happy they are finally going to get paid off in April 2026. It is a nice feeling to finally be out of savings mode and into spending and enjoying mode. Paying this much in taxes is a privilege that I actually take great pleasure in because it means we won, we over-saved and we achieved FI and we can pull this off without any financial stress or burden. FI is finally setting in as I approach retirement later this year.

Back to the original thread, when it comes to any bank-to-bank transfers, I will never assume that it worked before and it should work again. It doesn't always work that way.