Scottrade Launches Limited Online Transfers via Money Direct

I don’t know how long this has been out, but I just noticed in my Scottrade brokerage account that there is a new service called Money Direct that allows you to electronically deposit money from a bank account. Note that I said deposit only, because you can’t use the service to withdraw. What’s up with that? How disappointing.

The service appears to use Yodlee Funds Transfer as the back end, which is similar to the CashEdge service banks like HSBC and Bank of America use. You can basically link any savings or checkings account as long as you have a routing number and account number. Verification is either via website login information or trial deposits.

Here is some more useful info from the Money Direct FAQ:

Q. What is Money Direct?
Money Direct allows you to electronically deposit funds from banks, credit unions, and select brokerage accounts into your Scottrade account. Money Direct utilizes the Automated Clearing House Network (ACH) process.

Q. How soon will funds be available for trading after I initiate a deposit using Money Direct?

Deposit Initiated
On *
Your
Checking/Savings Account Debited On
Your Scottrade
Account Credited On **
Monday Tuesday Thursday
Tuesday Wednesday Friday
Wednesday Thrusday Monday
Thursday Friday Tuesday
Friday Monday Wednesday
Saturday Monday Thursday
Sunday Monday Thursday

*Deposits requested after 8:45 PM EST will be initiated on the following business day.

**Money Direct takes three business days to settle. In the case of a bank holiday, Money Direct may take four business days to settle.

More transfer delays, boo. Sigh… I suppose this service is better than nothing. However, if you have $5,000 with Scottrade you can already get checkwriting access and use that information to link up your account for both deposits and withdrawals through various online savings accounts. And there is less ‘lost’ time between debits and credits. This is what I have been using for months now as a workaround, I’ll make a more detailed post on it if there is interest.

For my other experiences with Scottrade brokerage overall, please refer to my Scottrade review.

Comments

  1. My Schwab IRA has the same thing. It’s deposits only, but better than nothing. I don’t think I can link it to my bank accounts from the bank’s end though.

  2. When I opened my Scottrade brokerage account about a year ago I was so surprised that they dont offer online transfers. I went into my local branch and they told me that they had some issues with it. (They were hacked or something like that) I find it so inconvenient to drive to the office, especially since they close at 5.

  3. you can call them to ask for a withdraw
    and send them a check in the mail with your account # in the memo

  4. I don’t see what’s so hard about withdrawals. I know they have security concerns but so does every single bank that operates online.

    The withdrawal methods remain the same – mailed check, wire (fee), checkwriting/debit card (need $5,000) – but none are as fast and convenient as online transfers.

  5. I’d love to hear more about your deposit method. I have checkwriting enabled on my account but was under the impression it was a withdrawl only account number.

  6. I have another account with FirstTrade and they also require about 3 business days for deposit of $5000 or more. I am not sure if this is the standard procedure for brokerage firms, but the service Scottrade used to have was actually very good. For stock trading, 3 days of waiting is too long.

  7. I would also be interested in hearing about your checkwriting method. I have a Scottrade acct, and an ING account – would I be able to electronically send money through? Ever since Scottrade stopped the echeck, I’ve been so discouraged from depositing money simply because of the hassle.

  8. If you have a branch, you can drop off a check, the funds are available for trading the next day, as far as withdrawing the quickest way is just writing a Scottrade check to yourself and depositing it, for me the deposit shows up the next day, it’s quicker then using ACH with HSBC which takes 3 days.

  9. I wish Scottrade would credit the account the next business day like they used to.

  10. For some reason scottrade wouldnt accept my checking account. Strange, I know people that use my bank and do this with Scottrade. Maybe because its a business checking?

  11. Not sure if this applies, but the name on the bank account must match the name on your brokerage account, I’m sure. That’s one of the basic security screen that they run.

  12. How do you make a withdrawl from scottrade using money direct or w/e?

  13. Deposit only is secure since Scottrade used some cheaper backend company to transfer previous electronic transfers and it got hacked into. All Scottrade members who used this were recommended to change their bank acocunts and all kinds of stuff since the hackers got social security numbers, bank accounts, addresses and other personal info. I know, I was one that had to go through the nightmare of changing accounts.

  14. Since the security glitch some years ago, SCOTTRADE has not allowed electronic transfers to or from trust accounts, and Money Direct apparently does not either..

  15. Albeit the low brokerage fee and good customer service of Scottrade, the inconvenience of funds deposit and withdrawal without delay is THE main reason I’m using etrade and not my Scottrade account.

    With etrade, I can make instanteous deposit/transfer from and withdrawal to my bank account (that’s FDIC insured), and parked extra funds there for 3.3% which is very high in market right now. Although I’m paying $12.99 per trade in etrade (and soon $9.99 when I park more funds there), it gives me the liquidity that I’m unable to get with Scottrade.

    The other disappointing fact to the US settlement process in general is that, we still have T+3 settlement, where Hong Kong has been T+2 long ago.

  16. How to deposit funds into your Scottrade Account:

    Money DirectTM – Instantly and Securely Fund Your Account
    Easily, quickly and securely transfer funds online into your Scottrade account(s). Money DirectTM (ACH) facilitates same-day online fund transfers from your bank into any of your individual, joint, IRA, ESA or SEP accounts.

    If your bank participates in an ACH network or if you’re a first time Money Direct user whose account is verified by instant account verification, you can use Money Direct and transact the same day. If you use the challenge deposit method, you may have to wait up to three business days. New and existing clients will be given credit for the transfer the day it is requested, as long as the request is made prior to 8:45 p.m. (ET) Monday through Friday. Transfer instructions received on a non-business day or after the specified cutoff time will be processed the next business day around 6:00 a.m. (ET).

    Funds deposited through Money Direct cannot be used to purchase stocks under $4, any unlisted stocks, any options, or any stocks that are deemed non-marginable by Scottrade until the third business day after the deposit.

    Use Money Direct
    Learn More About Money Direct
    Wire Deposits
    Provide your bank with the following information:

    U.S. Bank: 721 Locust St., St. Louis MO 63101
    ABA# 081000210
    Company Name: Scottrade Inc.
    Scottrade account number: 1001086162
    Scottrade’s Complete Mailing address: P.O. Box 31759, St. Louis, MO 63131-0759
    Further credit to: { your Scottrade account number and title}
    If wiring funds from an International institution, use swift code: USBKUS44IMT
    Note: When the funds have cleared, the Account Balance page will update and there will be an entry added to your Account History.

    Check Deposits – mail or deliver a check to your local branch office.
    To Open an Account:
    Personal check written by the account holder
    Cashier’s check
    Money order
    Certified bank check
    Foreign check payable in U.S. dollars and cleared through a U.S. bank
    To Fund an Existing Account (in addition to the deposits listed above):
    Home equity check
    Money market check
    Credit card check (only acceptable to satisfy a debit balance)
    Starter/counter check (must have ABA routing and account number encoding)
    Check payable to the account holder*
    Government/tax refund check*
    Payroll check*
    Corporate check*
    * Check must be endorsed to Scottrade.
    The following are not accepted:
    Travelers check
    Gift check
    Check payable to “cash”
    Altered check
    Bank draft
    Post-dated checks
    Checks issued over six months ago
    Scottrade reserves the right to refuse a check for any reason.
    Scottrade does not accept currency deposits.

  17. Question about Money Direct deposit in Scottrade…

    If i deposit on Wednesday afternoon, the fund will be available for trading on the following Monday. Will I be able to get my restricted fund cleared sometime in the weekend so I can place an order for purchasing a stock that gets queued till Monday market opens??

    Thanks

  18. Money Direct is deposit only at Scottrade because, as everybody knows, the market is just going to take all your money anyway, so no need for withdrawals. It also prevents an electronic “run on the market” where everyone instantly cashes out so they can buy physical gold and silver. If you can’t touch it, you don’t own it!

Trackbacks

  1. [...] This is just a follow-up my previous post on Scottrade enabling electronic deposits, but not withdrawals. You can get withdrawals too if you (a) can get $5,000 in total account equity (stock holdings + cash), and (b) use an online bank account that allows external links (ING, Emigrant, HSBC, etc.). [...]

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