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Holds on CIBC LOC?

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Mar 23, 2004
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Holds on CIBC LOC?

I just got a CIBC LOC (FINALLY!!) so I deposited a cheque into it to test. But then I found out that the entire cheque amount was on hold. So I called in and ask about my hold limit, and was told there aren't any for LOC accounts and all cheques are subject to a 5 day hold. Is the rep BS'ing me or is it true? Because that certainly wasn't the case with my TD LOC (I have a 3k hold limit).
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Jun 28, 2011
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For my CIBC chequing account there is a hold after the $3000 threshold and the hold is for 5 days.
I don't know about LOC's as I don't deposit cheques into my LOC. I'd speak to an account manager about that hold as whoever you spoke to may not have a clue. (Seems to be the norm these days)
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Feb 25, 2014
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That hold does not apply as you can withdraw your money without any interest charges if your cheque clears
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Jan 21, 2014
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yeah it's kind of weird putting a hold on money deposited in LOC. You didn't write a cheque bigger than your LOC did you? So what is the point of holding? So they can charge you interest from LOC even though you don't have a negative balance when you use the fund during holding period?
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MehtabS wrote: That hold does not apply as you can withdraw your money without any interest charges if your cheque clears
Oh thanks...very interesting. So even if I have a -ve balance no interest will be charged as long as the cheque cashed a few days later? You tried this before?
mkl38s wrote: yeah it's kind of weird putting a hold on money deposited in LOC. You didn't write a cheque bigger than your LOC did you?

So they can charge you interest from LOC even though you don't have a negative balance when you use the fund during holding period?
It's a $10 cheque :lol:

That's exactly what I am worried about. It's not the end of the world though. I will be using emt to get money 99.8% of the time in so that wont incur any hold for sure.
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Jul 18, 2016
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I'm trying to get my head around this.

Let's say your credit limit on your LOC is 10K. You deposit a $1000 cheque. This leaves you with effective available credit of 11K. Therefore, unless you're attempting now to withdraw 11K, the hold really shouldn't matter. It makes senses actually if 10K is the max they're willing to give you since grabbing the additional 1K before the clear would force them to lend you 11K, rather than the maximum 10K they've determined according to your credit and income.

Anyhow, that's my rationalization for what is happening to you with CIBC.

**** as noted in the post above, I would complain heavily if you're charged interest on funds that are currently on hold.
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bewiseman wrote: I'm trying to get my head around this.

Let's say your credit limit on your LOC is 10K. You deposit a $1000 cheque. This leaves you with effective available credit of 11K. Therefore, unless you're attempting now to withdraw 11K, the hold really shouldn't matter. It makes senses actually if 10K is the max they're willing to give you since grabbing the additional 1K before the clear would force them to lend you 11K, rather than the maximum 10K they've determined according to your credit and income.

Anyhow, that's my rationalization for what is happening to you with CIBC.
That is not the case actually. Under the factors that you mention, the available credit limit is STILL 10k but my balance is 11k. So the hold does matter since if I withdraw any money I will be under my credit limit which CIBC can then charge interest on. However, per MehtabS's post, I wont be charged interest as long as the cheque clears. Interesting indeed.

Also just noticed that you can add email addresses for EMT for CIBC, RBC/BMO/EQ allow phone numbers.
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Yes I have done it. No interest charge as long as cheque clears. Also you can't withdraw beyond your limit. Say you have 10k limit and depost 20k cheque, you can only withdraw 10k until cheque fully clears.
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Who even charges interest based on your available credit or credit limit? Account balance is what matters. With a $10k LOC. If you deposit a $10k cheque, and they give all of that without any holds, you can withdraw $20k, and possibly run away with it. If they hold that $10k, your balance is still $20k, except you can only withdraw $10k. You withdraw $10k, the cheque is not returned, then your LOC available credit is $10k, your balance is $0, and you are not charged interest. If they let you withdraw $20k, you withdraw $20k, and the cheque is returned, you are $10k OVER the limit.
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angel_wing0 wrote: That is not the case actually. Under the factors that you mention, the available credit limit is STILL 10k but my balance is 11k. So the hold does matter since if I withdraw any money I will be under my credit limit which CIBC can then charge interest on. However, per MehtabS's post, I wont be charged interest as long as the cheque clears. Interesting indeed.

Also just noticed that you can add email addresses for EMT for CIBC, RBC/BMO/EQ allow phone numbers.
Wow, the LOC I have with Scotiabank can be overpaid giving me more credit than the base limit. Yes, I understand why you're concerned now. That's just a bit ass backwards of CIBC.
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angel_wing0 wrote: I just got a CIBC LOC (FINALLY!!) so I deposited a cheque into it to test. But then I found out that the entire cheque amount was on hold. So I called in and ask about my hold limit, and was told there aren't any for LOC accounts and all cheques are subject to a 5 day hold. Is the rep BS'ing me or is it true? Because that certainly wasn't the case with my TD LOC (I have a 3k hold limit).
The most TD will release to you is $2k - they don't have $3k. At the same time, holds are dependent on your account settings. Same holds apply whether you are depositing it into a LOC, chequing or savings.
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MehtabS wrote: Yes I have done it. No interest charge as long as cheque clears.

Also you can't withdraw beyond your limit. Say you have 10k limit and depost 20k cheque, you can only withdraw 10k until cheque fully clears.
Perfect, thanks.

I am not going to withdraw my entire limit. But let's say I deposited a $200 cheque to a 10k LOC, and I proceed to withdraw $100. In this scenario I will be lending $100 and being charged interest on that since the $200 cheque hasnt cleared yet. That's my concern.
bewiseman wrote:
Wow, the LOC I have with Scotiabank can be overpaid giving me more credit than the base limit. Yes, I understand why you're concerned now. That's just a bit ass backwards of CIBC.
CIBC allows you to do that too. The issue here is for cheques CIBC holds them until they clear before they will allow you to have more credit than the base limit. This can easily overcome by using EMT as I mentioned above.
boyoflondon wrote: The most TD will release to you is $2k - they don't have $3k. At the same time, holds are dependent on your account settings. Same holds apply whether you are depositing it into a LOC, chequing or savings.
i see, maybe i remember wrong. But the most i have got to is around $1500, and that's only once or twice in the past 5-6 years.
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hvwozq wrote: Who even charges interest based on your available credit or credit limit? Account balance is what matters. With a $10k LOC. If you deposit a $10k cheque, and they give all of that without any holds, you can withdraw $20k, and possibly run away with it. If they hold that $10k, your balance is still $20k, except you can only withdraw $10k. You withdraw $10k, the cheque is not returned, then your LOC available credit is $10k, your balance is $0, and you are not charged interest. If they let you withdraw $20k, you withdraw $20k, and the cheque is returned, you are $10k OVER the limit.
I know this is completely different but RBC has started charging interest on Norbert's Gambit (3 days settlement time)
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angel_wing0 wrote: I am not going to withdraw my entire limit. But let's say I deposited a $200 cheque to a 10k LOC, and I proceed to withdraw $100. In this scenario I will be lending $100 and being charged interest on that since the $200 cheque hasnt cleared yet. That's my concern.
Not the way it works.
If the $200 cheque clears there is no interest charged as you are in a positive balance. Should the cheque not clear, the deposit is reversed and you are charged interest since you drew on your LOC.

As to limits it is what you and/or the bank have set up.
As a previous victim of ID theft and compromised accounts I keep all my personal electronic transaction limits set low - lower than the banks. When I am doing a bigger transaction I will call telephone banking or go in to the branch ahead of time and set my limit to cover the transaction. Once I do the transaction, I do the reverse and lower my limit.
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ROYinTO wrote: Not the way it works.
If the $200 cheque clears there is no interest charged as you are in a positive balance. Should the cheque not clear, the deposit is reversed and you are charged interest since you drew on your LOC.
Great, thanks for confirming what methabS said as well.
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Yeah, we just said it differently.

Now for many people, there are times in their life when large transactions happen. E.g. Sale or purchase of real estate, inheritance from an estate, personal injury award and so on.

If you talk to your branch ahead of time many of the limits / holds etc can be temporarily lifted. The $ has to go into one account to start with say your chequing. From there you can pay down a credit card, LOC, Mortgage or put some into savings, TFSA, RRSP or what ever. You work up your game plan and then sit down with them before to work out the details. You might be able to do 4 out of 5 things the day the money comes in and the last when a possible hold is lifted. It helps if the $$ stays within the bank - but they will generally work with you if you ask.
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Feb 18, 2004
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angel_wing0 wrote: i see, maybe i remember wrong. But the most i have got to is around $1500, and that's only once or twice in the past 5-6 years.
The hold limits in TD are tied to the debit cards. Therefore if you have 2 debit cards it is possible to have 2 hold limits. That limit is applied automatically to everything you deposit through the ABM and it does not matter which account you deposit the funds into. Many years ago staff can lodge NO HOLD on debit cards but now they have removed that option to prevent fraud.

If you deposit cheques in person the branch staff do have discretion to deposit cheques without holds. Therefore if you are depositing bank drafts or certified cheques, do that in person and ask the staff to verify and deposit without holds.
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Just went into a branch, and a business account rep did confirm that all LOC accounts will have all cheque deposits hold for 5 business days, no exception. Well, now I know for sure.
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I have exprience with BMO, any new account has 5 business day entire cheque hold policy for first 30 days including LOC aacounts even if have perfect track record banking with BMO.

I guess CIBC have similar informal policy as BMOfor security reasons and banks are hesitent to say why they hold cheques and you should wait for 30 days, they might even flag your account if you make too many enqueries why they hold your cheque.

And its not even important to deposit cheques or cash on LOC if you have chequing account, why deposit cheques on LOC if you have cibc chequing account?

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