3 ms·

You can log on to your 401k account and move your position over to treasury bonds or something that looks safer, but they will wait two business days to process

You can log on to your 401k account and move your position over to treasury bonds or something that looks safer, but they will wait two business days to process the transaction. I know from personal experience; don't see much information online about the phenomenon. My guess is that they are legally allowed to do this, probably because they wrote the law.

JumpCrisscross 8y ago
> they will wait two business days to process the transaction This was a decision your 401(k) provider made. The proper person to gripe to is whomever in HR chose a cheap provider. (They make up for reduced administrative costs by (a) being less efficient and (b) capturing float.)
- fallingfrog 8y ago
  Fidelity is a cheap provider?
  - JumpCrisscross 8y ago
    > Fidelity is a cheap provider? No, but they have different tiers of service. In my account, for example, I can sell and purchase intraday. They do what they do for my personal account, which is credit the cash intraday. TL; DR This is not a legal, but contractual, requirement.
    - fallingfrog 8y ago
      I see! Good to know. Still, I'm inclined to believe that more people are in my tier of service than are in yours.
    - mi100hael 8y ago
      It's a legal requirement to some extent unless you have a margin account. Funds take two days to settle. If you sell, buy, and sell again within two days, your account can be suspended for violating SEC rules. https://www.ally.com/do-it-right/investing/what-are-unsettled-funds/ https://www.ally.com/do-it-right/investing/what-are-unsettle...
- fallingfrog 8y ago
  Ah, here it is in the FAQ: "When selling a mutual fund to purchase a fund in a different family, you are selling the mutual fund you own and using the proceeds to purchase another fund in a different fund family. Since you are performing a cross family trade, the settlement date for the sale will differ from the settlement date for the purchase. Typically, cross family trades execute over two business days."
- fallingfrog 8y ago
  The funny thing is, even though they say "up to 2 business days", the trade was executed at 3:59:59 PM on the dot, on the 2nd business day after I made the request. I'm certain they waited until that moment to execute the trade because legally, they can.

JumpCrisscross 8y ago

> they will wait two business days to process the transaction This was a decision your 401(k) provider made. The proper person to gripe to is whomever in HR chose a cheap provider. (They make up for reduced administrative costs by (a) being less efficient and (b) capturing float.)

fallingfrog 8y ago
Fidelity is a cheap provider?
- JumpCrisscross 8y ago
  > Fidelity is a cheap provider? No, but they have different tiers of service. In my account, for example, I can sell and purchase intraday. They do what they do for my personal account, which is credit the cash intraday. TL; DR This is not a legal, but contractual, requirement.
  - fallingfrog 8y ago
    I see! Good to know. Still, I'm inclined to believe that more people are in my tier of service than are in yours.
  - mi100hael 8y ago
    It's a legal requirement to some extent unless you have a margin account. Funds take two days to settle. If you sell, buy, and sell again within two days, your account can be suspended for violating SEC rules. https://www.ally.com/do-it-right/investing/what-are-unsettled-funds/ https://www.ally.com/do-it-right/investing/what-are-unsettle...
fallingfrog 8y ago
Ah, here it is in the FAQ: "When selling a mutual fund to purchase a fund in a different family, you are selling the mutual fund you own and using the proceeds to purchase another fund in a different fund family. Since you are performing a cross family trade, the settlement date for the sale will differ from the settlement date for the purchase. Typically, cross family trades execute over two business days."
fallingfrog 8y ago
The funny thing is, even though they say "up to 2 business days", the trade was executed at 3:59:59 PM on the dot, on the 2nd business day after I made the request. I'm certain they waited until that moment to execute the trade because legally, they can.