Serious question - is there a legit reason for this? Especially accounts at the same financial institution?

I'm in the process of funding my Roth for the year. I initiated the $6k transfer from Wells Fargo to Fidelity on Tuesday.

I understand why this doesn't happen immediately, since I am going between two financial institutions. However, I can only put the money in a specific Fidelity account. The electronic transfer process won't let me transfer it to any other account other than my personal cash investment account at Fidelity.

That money was available (not showing as "pending") in my Fidelity account either late Thursday or early Friday.

I have to do a backdoor Roth, so I moved it from my Fidelity cash to my traditional IRA on Friday. It showed as "pending" for two days. I finally moved it to my Roth account yesterday - where it again shows as "pending". It will probably be later today or tomorrow before I can invest it. All total, this process takes an entire week every year. One year I got distracted and forgot to invest the funds once they hit the Roth.

Why are these Fidelity account transfers taking so long? Every other bank I deal with (Wells Fargo and Capital One) show funds as available pretty much immediately if I do a transfer between accounts at the same bank.

Between all of my other Fidelity accounts, I have 100x this amount of money, so it's not like Fidelity has any risk of getting stiffed. Plus, once they approved the transfer from WF, they know the money is there.

As a fellow Fidelity Customer, i feel your pain. I'm not completely sure why this takes so long.

Complete and utter speculative thought that probably holds no water whatsoever: could it be due to that fact that Fidelity is new to the "banking" world (relatively speaking)? IOW, they added banking after the laws changed allowing investment companies to also act as banks and maybe there are just some internal integration hurdles they have never solved because of that? Whereas banks that added investments had an easier integration path that direction?

That sounds dumb and illogical, but I've seen more nonsensical integration problems than that in my career so it wouldn't surprise me.

I have a similar hypothesis. But I thought I'd post anyway to see if someone could confirm or give me some other explanation.

I know all banks are not created equal. I'm the treasurer of my son's band booster club, and the amount of frustration I have with the limited capabilities of that bank account is way too much for this to be a volunteer position.

In this day and age, though, electronic transfers ought to be happening same-day. This "pending" status is maddening.

They want a few nights to titillate your money in the overnight markets.

Too much security around transfers these days as well. I want to transfer to another financial institution - I get a phone call about it. It's annoying.

Interest overnight for the banks. Any limiting of access to your money is how they make extra money.

Got mad at a bank one time when they tried to hold back a portion of a check deposit for clearing when the account had 10 times that amount. Threatened to request a cash withdrawal of the full account on the spot and they decided to let the check clear.

Wait will inflation continues to rise and we are still reporting/limiting some transfers to $10,000

Back to big, bad Merrill with their high fees. Transfers there happen instantly. I have no idea how, or why, any major bank would hold a transfer out. I can set up recipients in my BoA account and move $ with a computer click. Now some (most) financial institutions will hold a deposit until cleared, but they wait too long.

This is one thing Elizabeth Warren harped on that I actually agree with. An EFT should take about as long as email takes for Institution A to validate and release funds to Institution B.

I think the bank manager likes to cash out and get his greedy hands on it

Dare I go there? The slowness of interbank transfers is one of the primary use cases for crypto.

I reread OP....on intrabank transfers within Fidelity, I can usually move money immediately between accounts. The back door Roth transaction specifically takes more time for whatever reason. Presumably because it's unique?

I'll pay closer attention to this. We have several account types so I might be mixing them up in my head.

Yeah, I was complaining about both, but mostly the Fidelity to Fidelity accounts transfers.

And it's not just the Roth account. Once it got to Fidelity from WF, which took three days, it showed as pending in the traditional IRA for two days, now pending in the Roth since yesterday. This money is not invested - I can't move or invest as long as it's pending.

My intra-bank transfers at Wells Fargo and CapOne are available almost immediately. I don't understand the hold-up.

Are you sure you can't invest it? I helped a friend set up a Roth with fidelity the other day and he put $2000 in from a bank account he linked and even though the funds say pending he was able to invest it right away. He does have other accounts with Fidelity but it sounds like you do too so not sure how he was able to do it.

Banks arent parking your deposits in a glass case to watch over. They are spending your money to make themselves money. When you want to unwind account dollars, they have to unwind your money before they can give it back to you.

But is it specific to IRAs? I think it might be due to the rules around those. When I transfer from non-IRAs to non-IRAs within Fidelity it's immediate...*I think*.

Any traditional bank external transfer to/from Fidelity Spending always have a couple of Pending days baked in. However, moving money to/from Fidelity Spending between non-banks is immediate. Examples: Coinbase, CashApp, Venmo.

Thus, this takes me back to tech integration limitations for external transfers. Bank to bank is old, slow tech and bank to new tech is fast.

I couldn't even move the money from the traditional IRA to the Roth until the "pending" status went away, and I can't invest the Roth funds.

It's strange because it really does look like the money is there, but when I go to transfer or invest, I can't. It's like it's not allocated to anything, even if it's just cash.

YouBet said:

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But is it specific to IRAs? I think it might be due to the rules around those. When I transfer from non-IRAs to non-IRAs within Fidelity it's immediate...*I think*.

Any traditional bank external transfer to/from Fidelity Spending always have a couple of Pending days baked in. However, moving money to/from Fidelity Spending between non-banks is immediate. Examples: Coinbase, CashApp, Venmo.

Thus, this takes me back to tech integration limitations for external transfers. Bank to bank is old, slow tech and bank to new tech is fast.

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That I don't know. I put it in my cash account first, because that's the only place I can transfer to from WF. So, that always takes a few days since it's from another bank. I have no reason to transfer money to any of my other Fidelity accounts except for the two IRAs.

The WF transfers shouldn't take as long as they do, either, though. Whether it's Fidelity or Capital One, they should be able to verify the funds with WF immediately. I always hate transferring money because it shows as gone from my WF account immediately but doesn't show up elsewhere for 2-3 days. So my money is "missing" in the interim.

TXTransplant said:

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I couldn't even move the money from the traditional IRA to the Roth until the "pending" status went away, and I can't invest the Roth funds.

It's strange because it really does look like the money is there, but when I go to transfer or invest, I can't. It's like it's not allocated to anything, even if it's just cash.

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Why not set it up to transfer directly to the account you intend to invest?

I transfer money from USAA to fidelity, and it can go directly to my brokerage, ira, or roth depending on what I'm doing with it. I don't have to transfer to 1, only to internally transfer in fidelity to another.

62strat said:

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TXTransplant said:

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I couldn't even move the money from the traditional IRA to the Roth until the "pending" status went away, and I can't invest the Roth funds.

It's strange because it really does look like the money is there, but when I go to transfer or invest, I can't. It's like it's not allocated to anything, even if it's just cash.

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Why not set it up to transfer directly to the account you intend to invest?

I transfer money from USAA to fidelity, and it can go directly to my brokerage, ira, or roth depending on what I'm doing with it. I don't have to transfer to 1, only to internally transfer in fidelity to another.

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As I said above, I can't. I've tried to move money from WF directly to the cash portion of my IRAs, and the transaction was denied. I don't know whY. The only place I can transfer to is the cash portion of my personal brokerage/investment account.

Yea don't bank with Wells Fargo

see below

TXTransplant said:

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62strat said:

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TXTransplant said:

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I couldn't even move the money from the traditional IRA to the Roth until the "pending" status went away, and I can't invest the Roth funds.

It's strange because it really does look like the money is there, but when I go to transfer or invest, I can't. It's like it's not allocated to anything, even if it's just cash.

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Why not set it up to transfer directly to the account you intend to invest?

I transfer money from USAA to fidelity, and it can go directly to my brokerage, ira, or roth depending on what I'm doing with it. I don't have to transfer to 1, only to internally transfer in fidelity to another.

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As I said above, I can't. I've tried to move money from WF directly to the cash portion of my IRAs, and the transaction was denied. I don't know whY. The only place I can transfer to is the cash portion of my personal brokerage/investment account.

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ahh, maybe try this; you have to link them.
I remember at some point, I had to link every fidelity account to my checking and/or savings individually.
accounts&trade->transfers->manage bank accounts->link a bank account.

I am an IT consultant for the FS industry. I would chalk most of this up to extremely outdated technology coupled with government reporting regulations.

Almost every core banking and transfer process is still being run by batch mainframe processes at night. Almost every bank right now is trying to move these ancient applications off the mainframe to real time modern infrastructure.

I've wired six figures across the nation with no previous contact with the recipient bank in a matter of minutes, but Prosperity will put a 7 day hold on a $2k check deposit. Makes no sense.

harge57 said:

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I am an IT consultant for the FS industry. I would chalk most of this up to extremely outdated technology coupled with government reporting regulations.

Almost every core banking and transfer process is still being run by batch mainframe processes at night. Almost every bank right now is trying to move these ancient applications off the mainframe to real time modern infrastructure.

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Is it all 1970s Tandem NonStop servers and there are huge issues with error occurance on modern servers?

TXTransplant said:

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62strat said:

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TXTransplant said:

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I couldn't even move the money from the traditional IRA to the Roth until the "pending" status went away, and I can't invest the Roth funds.

It's strange because it really does look like the money is there, but when I go to transfer or invest, I can't. It's like it's not allocated to anything, even if it's just cash.

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Why not set it up to transfer directly to the account you intend to invest?

I transfer money from USAA to fidelity, and it can go directly to my brokerage, ira, or roth depending on what I'm doing with it. I don't have to transfer to 1, only to internally transfer in fidelity to another.

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As I said above, I can't. I've tried to move money from WF directly to the cash portion of my IRAs, and the transaction was denied. I don't know whY. The only place I can transfer to is the cash portion of my personal brokerage/investment account.

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Did you ever try my account linking suggestion above?

I haven't because the money had already been transferred to Fidelity. I only do my Roth contribution once a year. So, I can go in and link them, but there is no reason to test if it works. At least not until next year.

The delay from WF to Fidelity wouldn't be so bad if the transfers to two Fidelity IRA accounts didn't also take two days each!

TXTransplant said:

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I haven't because the money had already been transferred to Fidelity. I only do my Roth contribution once a year. So, I can go in and link them, but there is no reason to test if it works. At least not until next year.

The delay from WF to Fidelity wouldn't be so bad if the transfers to two Fidelity IRA accounts didn't also take two days each!

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just test it with $1. At least you'll know now, and next year won't have to plan a week in advance.

1950s technology (ACH) that got a partial upgrade in the 1970s.

And it works ok for the big players b/c they wire the money.

And it works ok for small timers, just have to wait a few days.

But we are all now used to real time tech activity on our phones, and banks would like to update things but the regulatory framework isn't great.