Recently, due to my tax loss harvesting transactions, I decided to move part of my portfolio to Tradeking and try them out.
Because Tradeking has an ACH limitation of $10,000 per transaction, I had to split up my transfers into chunks of this size or smaller to have my money transferred. Tradeking happily accepted the money without complaints. According to their website, all incoming ACH transfers are subject to a 10-day hold before withdrawal:
After several rounds of ACH transfers, I found that trying to keep track of which ACH has gone through, which has not, and keeping a constant reminder to submit an ACH everyday is too much of a chore. I called their customer service to see if they could initiate a transfer in a larger amount. This was flatly denied, never mind this is what their website says:
Next, I checked to see if they could reimburse my wire transfer since before sign up, their customer told me that this could be arranged in an earlier email:
We would cover the banks wire fee for your first wire, and depending on how much you fund with perhaps future wires as well.
This was also denied.
Frustrated, and deciding not to deal with a company that says one thing in their statements but in reality does another, I decided to take my business elsewhere. I wrote out two checks from my account and starting withdrawing my money by ACH, back to the financial institution which originally funded the Tradeking account.
All this went OK for a while until the day when I called to ask about and then requested to DTC out a position I have with Tradeking (DTC is an electronic transfer of shares from one broker to another). In the same phone call, I indicated my intention to move my business out from Tradeking. BIG MISTAKE.
From that point onwards, Tradeking essentially placed a lock-down on my account. They cancelled my ACH withdrawal requests without any notice. The online ACH withdrawal requests would be marked “processed” but money was never transferred. They then told me that they are going to put a 60-day hold on any withdrawals from my account and would freeze my DTC transfer out. The stated reason was “risk management” but I suspect the main reason is that this is one of those brokers which would drag its feet and give hell to any clients trying to transfer their assets out to another firm.
My account is flagged as restricted.
I am stuck with a sizeable cash balance being held hostage at Tradeking. While being stuck at Tradeking, they will earn a miserable 0.05% APY (see below) whereas I could have easily gotten at least 3.5% from one of the many online savings accounts. Obviously, Tradeking will gain from this freeze on my cash balance at my expense because kick-backs / 12b-1 / rebate arrangements from the cash sweep firm back to the brokerage firm are fairly common.
Crappy Sweep Account Yield of 0.05% APY at Tradeking
I have already tried a few times to get Tradeking to at least return my cash balance but without success.
My only choice now seems to be to wait out the 60 days and then DTC out the position. I am wary however, because I don’t know what other tricks Tradeking will throw at me when I re-submit the transfer out request 60 days later.
If you are planning to sign up with Tradeking or even already have an account with them, I urge you to re-consider carefully because you might have to go through a lot of hassle getting your money back. When you ACH your money in, at the point of transfer, you are told that there is a 10-day hold before you can withdraw it. But if they do not like you in future, they will conveniently cite some “risk management” reason and hold your money hostage for a long time.
In my opinion, Tradeking should not mislead investors by stating a 10-day hold for ACH transfers. They should state clearly that there is a 60-day hold on ACH deposits before it can be withdrawn. At least investors would be able to decide for themselves beforehand if they want to ACH their money to Tradeking and do business with such a broker. If this 60-day hold statement was there, I wouldn’t touch Tradeking with a 10-foot pole.
Keywords: complain, complaints, sucks, issues, problems, cash balance, ACH, wire, review, overview, shady.