Financial Crooks

My most recent test of the slowness on inter-bank transfers was a test of how long it would take for a cheque deposited into a CIBC bank machine to appear as a deposit to a PC Financial bank account.

Why Would I Deposit a Cheque for PC Financial at CIBC?

PC Financial services are provided by the direct banking division of CIBC.

For us, there is no Loblaws or other branch of PC Financial nearby. However, a CIBC branch is within cycling distance of home. So it makes sense to deposit cheques at the CIBC machine rather than at a PCF machine.

Curiously, you can deposit cheques into a CIBC account using an app and taking a photo with your device, but you can’t yet do that for your PC Financial account. (You can deposit cheques using the Tangerine photo app.)

Why Would It Matter How Fast the Cheque Lands In My PC Financial Account?

Well, if you need the money from the cheque to pay your rent this month, it could matter a great deal!

In our case, we were trying to take advantage of a short-term interest rate bonus offered by PC Financial on new Savings deposits. The promotion stated the money had to be in our savings account by September 30, 2014. If it wasn’t, it wouldn’t earn any extra interest.

How Our Test Went for the Deposit of the Cheque at CIBC for PC Financial

We deposited a cheque into a CIBC bank machine located inside a branch at 15:58 (synchronize you watch, Jim!) on Monday, September 8, 2014.

The money appeared in our PC Financial chequing account balance on that same day: Monday September 8, 2014 before 20:53 pm which was the first time I checked our account.

I tested this again on Tuesday. A cheque deposited before 9 a.m. was posted to our account before noon.

Next Step: Testing How Long to Transfer the Money from our Chequing Account to our Savings Account

We then had to transfer the money into our PC Financial Savings account. We started the transfer on Monday September 8, 2014 at 20:55. The money appeared in our Savings account instantaneously!

Yet when we tried to repeat that on Tuesday, it wouldn’t accept the immediate transfer.

Why?

Well because the first cheque deposited was so small that it did not need to go “on hold.” The second cheque was more substantial so it is “on hold” and cannot be transferred to our savings account until it clears. However I’ve since clarified with PC Financial that an increased balance in the No Fee chequing account will also earn the 3.1% promotional interest rate, so I guess there’s no hurry to transfer it to our Savings account.

If you transfer from your Savings to your Chequing account at PC Financial, the fastest you can expect is an over night transfer as the program will not let you request a transfer on the same date. This is different than at Tangerine and frankly I find it very annoying.

But when you transfer from chequing to savings at PCF, it can happen immediately. Good stuff!

Unfortunately, your money may be “on hold” if you deposit a large cheque. Not such good stuff….but it may not actually matter depending what you need to do with the money.

The Conclusion

So in one afternoon and evening, I managed to deposit a cheque into our PC Financial chequing account using a CIBC branch bank machine, then transfer it that same day from our PCF chequing account into our PCF savings account. That means that as of tomorrow, we will start earning the 3.1% short-term bonus rate on our incremental savings.

And I will not have to wait till the larger cheque comes “off hold” before it will start earning the higher promotional interest rate because for this particular promotion it also applies to new funds deposited to the No Fee chequing account provided that increases our total deposited money above the amount we had on September 5.

So a mixture of win/delayed-win.

Related Reading

Do You Transfer Money between Banks to Get the Highest Interest Rate?
[When Will I Get My PC Financial Bonus Interest?]

Join In
Have you ever had it take days to get a cheque into your bank account? (Not the “hold” part but just into your account?) Please share your experiences with a comment.

As soon as markets start to go up and stay up for a few months in a row, someone starts predicting that they will crash. And when the TSX and NYSE hit new “record highs” the buzz became almost deafening: Now a MAJOR market meltdown was inevitable–it was just a matter of when. But why? Why do people assume that markets reaching all time highs mean a crash is coming: if the stock market is supposed to return an 8% or higher average, doesn’t it mean it MUST set new records and fairly steadily?

Why Does Anyone Invest in the Stock Market?

Investing for Income

Some people invest in companies listed on the stock markets to get dividends and distributions. Their investment choices are driven by a need for income.

Not all companies offer dividends or distributions though. Why would people buy shares in those companies?

Investing for Capital Gains

Many other people are investing in companies’ stocks to try to win a capital gain. They want to pay $20 for a share and sell it to someone else for $40, or more. They are willing to buy shares that don’t pay anything to investors but which may be worth more in the future than they are now.

Obviously, sometimes these investors are unlucky. The perceived value of the company drops and if they sell their shares they realize a capital loss.

Shouldn’t the Stock Markets Indices, Over Time, Go Up?

If you go to a site like Yahoo Canada finance, or sign in to a brokerage website, you should be able to look at a graph of the S&P TSX Composite Index over several years. Go to https://ca.finance.yahoo.com/q/bc?s=^GSPTSE&t=my&l=on&z=l&q=l&c= and if necessary click on: Max

It should have jagged peaks up and sharp valleys down, but there should still be an overall trend in an upwards direction. Or at least there should be if you believe that investing in the stock market should yield you a capital gain, over time, if you invest a tiny bit in every company in that market index.

If you look at the last 10 years of the S&P TSX Composite, you will likely notice it spiked up to a nice point at about 14 000 in 2011 and it’s currently (in September 2014) at 15 000 and still climbing. In 2008 it also reached over 15 000. On January 1, 1985 it was under 3 000.

The overall trend from 1985 till now is up.

So why, just because we are finally trading in the 15 000 plus range, are people shouting it’s going to crash?

For people who had all of their money invested before May 2008, and who invested for capital gains not for dividends or distributions, it must seem like the party is just about to start. For years they’ve waited patiently, pocketing any useful distributions and dividends, but biding their time waiting for some big ticket capital gains.

Unless there’s some “invisible ceiling” at just over 15 000 why should anyone be panicking?

Doesn’t Couch Potato Index Investing preach that you don’t try to time the market, you just buy steadily and hang on for the ride? I’ve never read an index investing article that said there is a maximum the market is allowed to rise.

Why I Am Still Investing a Bit a Month Every Month Into the Index Funds Mirroring the Stock Markets

I’m not the usual type of investor. I’m very conservative and very risk averse. So my portfolio stands on a wide, thick platform of fixed income securities. Enough, in fact, to provide a modest retirement income if all of our other investments failed.

Most of our new money, however, is going into the equity markets.

We are still vacillating about whether to invest the majority of it into income-generating investments or into “buy the entire market” index investments.

While we are deciding, we are putting some of our new investment funds into both. It’s wishy washy but it beats having everything sitting in cash.

So every month, we put a bit more into the stock market in the form of “buy the entire market” “ultra low fee” ETFs.

And I don’t see any reason to stop doing that just because the markets are at “all time highs.” If they never pass today’s “all time high” then there is no actual capital gain ever to be made by investing in index funds. A whole branch of the investing industry is mistaken. They will all lose money and never be able to speak on CTV or CBC again.

That seems unlikely to me. Yes, there may be a market pullback or even a radical plummet. But if you believe that capital gains can be made by investing in an index-matching-style then sooner or later, the money you invested in an index should return to parity and should, ultimately, increase in value.

I don’t like the uncertainty. I don’t like wondering if I might be buying just at the time when the rug is about to be pulled and the market will tumble into a trench it will take years to climb back out of. But that’s the uncertainty I have to accept if I want to invest in index-linked products in order to (theoretically) capture some capital gains worth more per dollar invested than my fixed income investments can yield.

Wish me luck!