I recently moved a large sum from my Fidelity Roth IRA and TOD accounts into my cash management account so I could write a check to my contractor after some ongoing infrastructure work is finished. The total sitting in CM and now available for check writing is over 25K. While I already had several unused checks on hand, I thought it would be a good time to order some new ones. I ordered the checks around the 20th of June. As I understood, regular mail delivery (likely no tracking number) was the only option. When they hadn’t arrived within 10 days I phoned Fidelity and was told they had shipped from the printer June 26. It has now been more than 10 days since they supposedly shipped and still no checks. I’m becoming a bit concerned about security with so much cash sitting in the cash management account.
- Is there a better way to receive new Fidelity checks - perhaps with tracking?
- How good is Fidelity’s
fraud detection methodology in the event an unauthorized person were to submit a fraudulent check?
- It’s not a good time to put a “stop” on my checkwriting option with a large bill to pay pending
- I could transfer the sum from Fido to my credit union and then pay the contractor with a check from that account. One issue is that some of the $$ is earmarked for continuing to pay down my 18-month no-interest Fidelity Signature card which I normally process directly out of my Fido cash management account.
- I could move everything into my TOD account at Fido for safety until such time as I actually mail a check. It would then need to transferred back into cash management. Might raise some eyebrows at Fidelity.
- I could wait a few more days. Just because the printer told Fidelity the checks were mailed the 26th doesn’t necessarily mean they actually went into the USPS system that day
Any thoughts appreciated. I think the issue of account security involving the cash management account at brokerages may be of broader interest. Since I now posted my concerns I’m expecting they will arrive tomorrow.
Comments
Fidelity allows you to "freeze" your brokerage accounts to stop all transfers. It is easily reversible
Can you "freeze your CMA the same way?
We use a local B and M bank ( also locally owned) for all our checks and bill payments. They pay almost zero interest, but we don't keep much in there at anyone time. I also use an "uniball" pen that I understand uses ink that soaks into the paper to write checks (ballpoint ink can be "washed off") but try to avoid checks all together.
Have you signed up for USPS informed delivery?
I can see each morning what mail is coming. Some don't show up - probably misdelivered - but they show up 4-5 days later.
In the meantime, just monitor your Fido CMA a/c.
Does it allow setting alerts for large transactions?
Thanks much for the suggestions.
Years ago, Fidelity offered a free Amex Gold card for Premium (and Private Client) customers. It could be used as an ATM card, but with an important difference. It was not a debit card. It was a charge card. When used as an ATM card Fidelity would automatically pay off the ATM charge nightly. So it received charge card protection. At least that was my understanding.
With bill pay (from both "regular" and CMA brokerage accounts) I don't find much need to write "real" checks anymore. We got a reorder of checks 17 years ago and still have around 150 checks to go. (One doctor of mine charges for credit cards but accepts checks and cash(!).)
Finally, Fidelity doesn't raise an eyebrow at any sort of movements that "mere mortals" make. Perhaps they might wonder about an 8 or 9 figure transaction; maybe even that much wouldn't show up on their radar.
Where on the check do you state which account to remove the money?
Can one get different checks for different accounts?
I have a Schwab checking account. Once I had a double credit card payment which was a over draw. Chuck turned to my Individual account & took enough money to cover the over draw.
Thank you for your time, Derf
Still $25 k is a tad more than I carry in that checking account!!
The brokerage account number is embedded in the checking "account" number as the last nine digits, with X=5, Y=6, and Z=7.. So each brokerage account gets its own checkbook.
I have a Schwab checking account. Once I had a double credit card payment which was a over draw. Chuck turned to my Individual account & took enough money to cover the over draw.
At Fidelity, one can link accounts (whether external bank accounts or internal brokerage accounts) to a CMA account (and only to a CMA account) for overdraft protection. Like @sma3 I'm not fond of linking accounts this way because if one account is compromised, the overdraft account is compromised as well. Obscure fact - you can't link community property accounts to a CMA account.
As I understand it, the checks in question are linked only to the CM account …
Hope check shipment is soon resolved. Bugs me that you can’t pay extra for a tracking number. One wonders where in the world they are printed printed. / Wrapping up a home improvement project and awaiting the final invoice.
Added link: https://www.forbes.com/advisor/banking/what-is-a-cash-management-account/
While @msf references “8 or 9 figure” transactions as perhaps “raising eyebrows” at big brokerages I must confess that mere 5-figure transactions constitute a big deal for this guy.
Monthly all credit cards are paid by check, and additionally all regular expenses, such as utilities, are paid by check. So we use a fair number of checks.
We still use checks because we don't want any outside agency to have digital access to our bank or financial accounts, due to the possibility of hacking. It's probably no exaggeration to say that almost weekly we read yet another account of hackers ripping people off one way or another.
Of course there are sometimes reports of people having checks stolen too, so there's really no completely safe approach to paying monthly bills.
What's your perspective on the danger of hacking vs stolen checks?
Thanks- OJ
I come at the issue of credit from a different perspective than most. Years ago i got overextended with credit and it scared the *#A## out of me. So part of “recovery” was swearing off all credit. Interestingly, it was the same time that I began saving, running an annual budget and taking a real interest in investing. So even today I’m loath to use credit cards. Cash rewards don’t thrill me. I figure those are offset by a natural propensity to spend more when using credit rather than paying in cash or on a debit card.
Except for travel I don’t like to use credit cards. However, after I’d already committed to a large home infrastructure project a year ago I received an offer of 18 months interest free credit on a new card thru Fidelity / Elan. The contractor was willing to put the job on a credit card with no fee. Rather than pull the project money from investments all at once (as first planned) it seemed to make sense to fund the project with this interest free line of credit and then repay it over time. It worked this time as my investments have done very well over that time frame. And, now a year later, I’m about to pay the entire sum off.
I’ve always felt checks were very safe. Never ever had a problem with one. However in recent years, for better or worse, I’ve begun paying bills thru direct debit from my bank account. I was, however, a victim of identity theft 15-20 years ago and it may have been related to a newspaper subscription allowed to access my bank account. I’ll never know for sure. Law enforcement looked into it and believed it was a Russian based hacking operation. All they got was a few hundred dollars from one local bank checking account by running 3 or 4 bogus withdrawals. The bank made me whole. To @Old_Joe’s question - Yes, I do view checks as safer than authorizing direct withdrawals. But the difference isn’t great enough to dissuade me from using the latter.
After the above affair I subscribed to Identity Guard . They are excellent. I have a reasonably priced annual plan (pay once yearly). They are very good at notifying me of any suspicious activity, changes in credit rating, credit inquiries, newly opened lines of credit, etc.
Re “What's your perspective on the danger of hacking vs stolen checks?” I don’t have an intelligent answer. Two different birds. Neither is enticing. A “hack” implies a successful operation. But a stolen / lost check is only a first step. Any culprit still needs to make a withdrawal using such to be successful.
Bill payment systems make electronic payments, or if that is not possible (e.g. to your landlord) they send paper checks. It is true that they need the account number of the account you are paying.
This "push" method is different from letting creditors "pull" money from your account (what hank referred to as direct debit). I generally don't permit that. If necessary, one can set up an account with a small balance - sufficient to pay the current bill - to wall off assets from the outside agency.
Cash rewards don’t thrill me
Even so, they are a secure way of making bill payments. Like direct debits, you don't have to worry about making timely payments - it's automatic. So long as you make at least as much on the cash back as the payee is charging for paying by CC, you're not losing. If you dedicate a CC for bill payments alone, you can avoid the temptation of buying more because you have a CC.
Of course there's still the question of how you pay the CC bill - paper check, bill payment system, direct debit. But by using a CC there are many fewer bills to handle.
Anyone with your check on hand has that info.
Of course, they don't know the balance, so if they are greedy, they may use an amount that may bounce.
Some (IRS, etc) ask to put Social Security# & phone# on the check - well, that's most of the info needed to apply for credit (fraudsters can get date of birth from social-media or other means).
So, I am also wary of writing checks to strangers. Check-washing is not the only way to get defrauded.
One concern of mine is that if the checks fail to arrive soon I’d be loath to use one of the existing blank checks until the issue was somehow resolved. Thus the ability to pay off the invoice could be compromised / delayed even though no detectable fraud had occurred. In other words, it could muck things up.
Footnote: Still no checks as of July 9. Fidelity said they were mailed out
June 20June 26. E-Gads!Now, save your scotch for another day.
That took a while...
Also if you become a victim of check fraud, file report with your bank, police dept., & United States Postal Inspection Service.