Has the Chase Glitch Infected Fidelity? (My CMA Restricted)

Several weeks ago some reported what has been called the Chase Glitch. The glitch allowed people to deposit bogus checks at Chase ATMs and then immediately withdraw the funds.
That glitch has now moved to Fidelity, where some have tried depositing bogus checks via Fidelity's mobile app, and then immediately taking out the money. In response, Fidelity has limited check deposits via its mobile app, extended hold periods on deposited funds, and even locked some customers out of their accounts.
Chase Glitch: www.nbcnews.co...
Fidelity Glitch: frankonfraud.c...
Mobile Deposit Limits: / mobile_deposit_dropped...
ETF Deposit Hold Times: thefinancebuff...
Fidelity Locks Accounts: / 57k_of_funds_locked_wi... and www.bogleheads...
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While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I'm the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
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[@pomme4moi]

Great video. I hope the Chase and Fidelity scammers get criminal records with “felon” stamped in bold.

[@fabiGBOtown]

Fidelity has always treated me right. This is about as scary as it gets. Money moves fast in and out

[@kw7292]

It's called check kiting and people used it back in the 70's and I'm sure thereafter. Yes, it's a felony. It takes advantage of the float to make use of non-existent funds. Deposit a check on Friday, withdraw the funds, and try to cover Friday's check by Monday or Tuesday. You might do it again until you get a check from your employer the next Friday.

[@Fred2-123]

Yes. Check kiting and the float doesn't work anymore. A few years ago you could have 3-5 days to cover the check, These days I write a check to somebody, like the cleaning lady, and the check is paid the next day. At Fidelity. She cleans on Monday morning and the check hits my CMA account on Tuesday. She deposits in in her bank (Arvest) Monday afternoon.

[@rapfreak7797]

I’m pretty sure the Chase glitch was intentional. Rather than make you wait for the check to clear they make available a certain amount available immediately for convenience.

[@mynock250]

This is absolutely true.They just didn’t expect the hood Tik Toc criminals. It’s not a glitch, was never a glitch.

[@Dan-u1o7e]

You always tell it like it is Rob and keep the details simple in the explanation. I can't overstate how much I have learned following your channel. Thanks much!

[@WindomEarle19]

Long-time 401k and HSA account customer. Opened CMA account this week. Initiated a transfer from BoFA (pull). The cash is now stuck for three weeks. Contacted Customer support - nothing helpful, just general 'fraud prevention' talk. That would not have been an issue, had it been communicated upfront. Their policies indicate 9 business days or so. Very frustrating.

[@lizs502]

I don't know about Fidelity, but my regular bank's limit on the deposit amount can be exceeded by calling my bank and telling them how much I want to mobile-deposit, then my bank opens a temporary window of time that accepts up to that higher amount.

[@wacoharder]

I don’t use CMA with Fidelity. However, I have brokerage account, and IRAs with Fidelity. I have checking and savings accounts with Chase. I have moved most all my savings from Chase to my brokerage account so the cash is sitting in SPAAX getting a much higher return. I do this transfer by initiating the request through Fidelity to transfer to Fidelity from Chase. I hope the issue you’re discussing doesn’t apply to this since it’s not CMA.

[@StewDanko]

It's called double presenting a check. If it's done on purpose it is a crime. If you have an account at chase, and you report a double presented check, they will replace the phones until they can determine if the funds were legitimate or fraudulent that were done with a double presented check. This is not a glitch. This is the way banks work.

[@Low__expectations]

Not a glitch. This has been around forever and every bank will have it. It's a balancing act done by each bank on how much of the deposit they will give to a customer before the full amount actually clears. There's no ideal amount or solution for it. Chase was more generous until now where people are being tricked into thinking it's a 'glitch', so they've been forced to ratchet things down. As for pushing/pulling, clear times are one thing but you also have to factor in push limits as well. Different banks will have different amounts you can push per day/period of time. Pulls can often get you around those limits as that tends not to be restricted as much as a push.

[@Fred2-123]

Yup. My credit union limits a push to $1000/day. For larger amounts I always have to do a pull. No such limit on those.

[@WalterShore]

Rob, I like your videos. Great information. I just checked my deposit limit, and it is 500k. I have been a fidelity customer for decades. I have never deposited a single check with them. I normally deposit to our bank. After watching your video on you switching to the cash management account from using a bank. We are thinking of doing the same. I guess we always had that option but never thought about it.

[@Boblonious]

I checked and it says my limit is also 500k. It's a brokerage account, not a cash management account, so maybe they're different? Or maybe it's based on your history / reputation / account size? I'd figure these companies would just have the means to hold the funds until the check clears, rather than limiting the deposits. But what do I know about running a big business...

[@Jean_Pecourt]

Same here. Limit is $500k for depositing checks. Has had CMA for a year or so.

[@T_Le]

I made the switch into the CMA account. You gain interest for unspent cash while doing everything a checking account can do except for cash deposits. I use chase bank to deposit cash. Its only a few days delay to transfer cash from chase into the CMA account.

[@HorrorAlgorithm0x1337]

Happened to me. I did a pull into CMA from another account on 9/17 and the money is not available until 10/9. I can deal with it but some people might be in trouble if they're living paycheck to paycheck. From now on I will do a push from that outside account into the CMA.

[@scifitherapy]

Same. My whole paycheck got swallowed into the pending abyss until 10/10. I'm also fine, as I've got plenty of funds to keep paying bills for awhile, but yeah, I can imagine some people are getting reamed by this.

[@dannycontreras5564]

Fidelity has handled this whole situation about as horribly as they could

[@ChrisS5416]

We just opened a CMA with Fidelity and had planned to use it for most of our banking needs. This a real bummer to hear.

[@keltonjohnson6197]

Giving you access to the money prior to it clearing is intentional and standard at all the big banks. It’s been like this for as long as I can remember and it’s super convenient.

[@itismyworld141]

some people were able to take out more than what was in the account after depositing their checks

[@UVA2004]

Long time Fidelity user. No CMA. No mobile check deposits. Opened new 529s and scheduled a deposit into the new account (previously linked to other fidelity accounts). Next day, entire account is locked with no notification. Spent 2 hours on hold to talk to fraud department to verify personal details. Been 10 days and still waiting for a call back. Will not be transferring any more funds in Fidelity any time soon.

[@rob_berger]

Thanks for sharing your experience and I hope it gets resolved soon.

[@HorrorAlgorithm0x1337]

That's brutal. How far away is the Fidelity office? I'm lucky as I have one less than 3 miles away. If you go to the office in person you can probably clear up this issue faster as the biggest concern without being in person is that they don't really know with whom they're speaking.

[@UVA2004]

@@HorrorAlgorithm0x1337 About 1 hour away. We live in a rural area. Good idea though - thank you for the suggestion!

[@UVA2004]

@@rob_berger Thank you - we are hoping to get a call for resolution soon. We were considering transferring the bulk of our assets from Vanguard to Fidelity. After this debacle, probably staying at Vanguard or may look into Schwab. We had no issues with Fidelity until this incident but the lack of communication/timely resolution is truly alarming.

[@Fred2-123]

I suspect all the banks are real touchy right now, and will act on a hair trigger. Videos of people taking money out of an ATM and dancing and throwing handfuls of bills in the air will have that effect.

[@Jim-ne2vl]

Rob, it’s called “check kiting”. It is a felony for those who employ this scam. It is NOT a glitch at Fidelity or Chase. I’m a Fidelity customer and I’m happy to have Fidelity employ these safeguards. There is absolutely nothing wrong with a financial institution waiting until your deposit clears before they let you draw it out. I wish more companies would do this so we could put an end to this sort of crime.

[@Jim-ne2vl]

By the way Rob. . . I really like your channel.

[@ethancanin]

Generally, that threshold for felony has moved to $500--2 year felony!

[@evolving_charlie]

Probably just because your account is new. My daily limit is $500,000.

[@tippa51324]

I’ve had my cash management account for over a year now and saw my daily deposit limit is $500,000

[@glensmith491]

There was a whole section about this in my money and banking textbook printed in 1983 (don't know the revision). It was a huge reason for certain legal kludge and management policies in the banking industry.

[@rob_berger]

Did we have Reg cc back then?

[@glensmith491]

@@rob_berger Don't remember just that my prof began that lecture by asking us how many felons were in his class🙂 That is why I remember that section.

[@andrewulrich6612]

We discovered the transfer lag at another online bank we use for a money market. We now try to originate to transfer from our local bank. Even if we have to do 2 transfers because of limits on either end. We may try Fidelity CMA at some point should rates significantly roll back in the online bank MM. Frankly it only dropped 10pbs with the fed 50bps drop. That's been a big nothing burger.

[@rapfreak7797]

I’ve tried a few online HYSA and stayed with one with quicker transfers in and out. They are going out of business so time to find another!

[@Fred2-123]

@@rapfreak7797 Most of my ACH transfers these days are completed overnight. A few years ago it was 2 to 4 days.

[@mongo2044]

Fidelity paid my Costco card a day late. This might explain it. I set pay by date 3-4 work days a head. But, it shifted day after due! Fidelity, of course, had no explanation. Costco Visa tacked on a fee and interest. I called and, they waived it. Also, I TRIED to do a push from Fidelity to Visa and Visa does not allow it! On another note, unlike Rob, it seems I am not limited by $1000 for deposits! I’m too scared to see how high but let’s say, at least a new Camry pre inflation. Not that I ever deposit that high a check!

[@T_Le]

I only use chase to deposit cash. Moved my savings and checking into two Fidelity CMA accounts. Did this over a year and no issues at all. I even did a mobile deposit of 60k check with no hassle into fidelity. Mines still limited to 500k.

[@ghostmane2643]

I'm limited by the sportsbooks for winning too much money. This limiting reminded me of that, lol.

[@Fred2-123]

When you push ACH money, the sending bank knows you have that money in your account. So the receiving bank figures it is good. When you pull, the receiving bank does NOT know that you have good money at the sending bank. When this happens, the ACH gets reversed at both accounts pretty quick, in my experience.

[@alcw625]

I have brokerage accounts but not CMA, no issues

[@DanBuchal]

I happened to just receive a check today I needed to deposit (a small amount). I decided to try doing mobile deposit for my Fidelity CMA. My daily limit is $100,000. After the deposit it did say it could take up to 16 business days for it to be available (which is crazy long compared to what I am used to with Ally) UPDATE: When I look at my account online it says "Est. completion: Deposits are generally posted to your account by the next business day" Time will tell I guess 🤣

[@DavidMontgomery1]

The bank where I have my checking account limits me to mobile deposits of $15,000 per month. I often find it to be inconvenient. It’s kind of ridiculous that I’m still moving money around by check in 2023, but it comes up in a few instances for me.

[@J-2024-v8i]

I understand the check deposit feature in the Fidelity app has several modalities of deposit. For example, people would make a “rollover” check deposit when making a 60-day indirect rollover from a 401k to a Fidelity IRA, or when doing an IRA to IRA rollover between custodians. Does the Fidelity app also restricts this type of check deposit to $1000?. That wouldn’t make any sense....

[@VV-uv1kz]

Just another data point. I do not use a Fidelity CMA. I use a Fidelity taxable brokerage account as my "checking account". I have written personal checks from that account and have used the ATM card linked to that account (very rarely). I have direct deposited to that account for many years and deposit the random paper check a few times a year through the iphone app. This account has been opened over 10 years. Looking at the check deposit limit as of today; it states a $500,000 daily limit. Maybe brokerage is different than CMA, but I would imagine the long relationship makes a difference?!

[@mongo2044]

You can have a transfer on death TOD account or brokerage cash or both. TOD skips probate. Use that for investing. Use cash as bank like account. Now your big taxable account is separate from your smaller cash account.

[@nunuvyurbiz123]

I have two CMAs, one old and one new. Mobile deposit to the old one is limited to $100K, and the new one is limited to $1K.

[@guzzi95]

Can you imagine what will happen if they ever force us to go to Digital Currency? Pray that never happens folks!

[@Kevin-fh5ci]

Yeah, no..this is a good reason to not use fidelity for cash management. I get the need for fraud management but if it isn’t fraud, it should be worked out quickly. No one can afford to have a lot of money locked up with no recourse for a long time. Attorney generals should be involved at that point. This is almost as bad as using PayPal as a bank.

[@GiantBlue1963]

Is the issue here that Fidelity and Chase were releasing funds before they cleared holding? That sounds like an internal programming issue. How long does it take to discover a check is bogus?

[@preparingforretirement]

Checked my fidelity CMA and it's at 100k limit for check deposit still. The account is about 4 yrs old but I have never done external transfers or debits/payments. I have only electronically transferred in or transferred between F accounts. That might be why I don't have a 1k limit. OH - and I keep it locked for transfers out unless I need to move funds. Then I unlock, transfer and lock again.

[@Because4545]

A few rejects ruin it for everyone else. Makes no sense.

[@Travlinmo]

My limit is still 100k and I have never used the deposit capability. It may be time based having had my account for years.

[@ctconstrictors5193]

My transfers have always been available immediately for use within my CMA but I don't do any investing within the account so it just sits in the holding

[@JosephSAi2HT]

Thank you Rob for sharing your life’s expertise in counsel for credible educational function! I appreciate your savvy in this nature!

[@nationsnumber1chump]

Dang only $1000, you can't even deposit a paycheck! 😯

[@michaelevans5328]

Makes no sense. Deposit limit on my CMA account $1000. Limit on the brokerage account I use as a pseudo checking account: $100,000.

[@JLo-k2h]

To hell with this. I'll stick with Chase bank, as they have locations all over the United States, and the world. Fidelity and you are traveling or in another country? You're screwed.

[@johnguertin5054]

my limit hasnt been lowered

[@AmateurInvestments]

The interest rate savings accounts will probably drop now that the fed interest rate is dropping.

[@rob_berger]

Agreed.

[@rapfreak7797]

@@rob_bergersomeone posted a good video summary on that just yesterday!

[@Rhaspun]

Glitch or not. It's not worth trying to take advantage of a glitch. Sooner or later a bank will find out. I'm retired and I don't want to spend money paying for a defense attorney.

[@The_Bond_Guy]

Does anyone know if you can use the Fidelity CMA for an LLC? I've run into some limitations on Fidelity for my LLC's account, things like not being allowed to get a debit card which makes paying for things a little difficult for my company. Thoughts?

[@andrewsmith8222]

There is a Fidelity business account which is effectively identical to a CMA.

[@jessicamcneil5624]

Is a Fidelity CMA the same as a Fidelity money market account?

[@javimelendez414]

Yes

[@jessicamcneil5624]

@@javimelendez414 thanks

[@justinothertech7867]

Off-hand, I'd say no. But it depends on what you mean by "money market account". My Fidelity CMA seems to me to be pretty much a brokerage account that has as its sweep account a FDIC-Insured "bucket". It also shares some useful characteristics (e.g. paper checks) with a checking account. I've had Fidelity MM (e.g. SPAXX) fund holdings concurrent with ETF holdings in my CMA. Since there are conflicting answers to your query, I'd recommend that you chat with Fidelity and don't invest until you're comfortable with their offering.

[@JosephSAi2HT]

Isnt Chase owned by JPMorgan?

[@maxcohn3228]

They merged in 2000

[@daveschmarder-1950]

Since Rob mentioned Billpay, I would like to make my quarterly Federal and NY estimated payments via Billpay. Does anyone here make their estimated tax payments that way? TIA

[@mancello]

I do it all the time. My Fidelity CMA is linked to the IRS so that I can pay estimated taxes and they withdraw it electronically.

[@daveschmarder-1950]

@@mancello Thanks. i haven't though of using my brokerage account.

[@ld5714]

Thank you Rob, good info. Thanks for sharing. Larry, Central Valley, Ca.

[@cisium1184]

Crimes are bad. I dislike them.

[@rburns4048]

I have had my fidelity CMA account for years and my check deposit limit on my phone is also $1000

[@BrianDonoghue]

Rob, I have a daily check deposit limit that exceeds $250k

[@kaiman5307]

Who uses check nowadays?

[@PhoKingU2Nite]

The real money glitch is they give you a 1099C