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I have an IRA CD which is maturing in approximately 30 days. I have decided to transfer this IRA CD from one bank to another bank in which I have an IRA account already setup. I submitted my paperwork to the bank that will be receiving the funds ("winning bank") and they have verified all of my paperwork is in order and have sent over all of the paperwork to the "losing bank." The "winning bank" is a large institution with a very standard process. The "losing bank" is a much smaller financial institution, but nevertheless, a US FDIC insured bank (real bank).
Last week, the "losing bank" calls me (on the phone) directly and states, "We are denying your request to close your account." No reason given other than they don't want to do it.
I respond, "You need to respond in writing, this is not appropriate over the phone."
Bank rep, "I'll talk to my manager and see what I can do."
End of conversation.
I call the "winning bank" and tell them what just happened, that the "losing bank" called me directly to inform me that my request was denied. The "winning bank" explains to me that the "losing bank" has to respond to both myself and the "winning bank" in writing, they cannot notify me of a denial without 1) legitimate reason and 2) a written letter.
I don't get it. What was the point of the phone call from the 'losing bank'? Was the "losing bank" hoping that I would say, "Oh, that's ok, I didn't really mean it when I filled out all of the paperwork to move my money."
I have a feeling that the 'losing bank' is playing games and will neither send a letter with a legitimate reason as to why they have denied my request and will renew my IRA CD for another 5 years.
My "winning bank" has assured me they cannot legally do this, but I'm not sure what my recourse is if they do.
I had a situation like that one time and I got it resolved within a few hours.
I called the bank every 1/2 hour asking them if the letter of denial had been written and faxed yet and I kept calling every 1/2 hour until they decided I was such a big pain in the rear they decided to release the funds without the early termination fee usually associated with early withdrawal.
Anything further you do with this bank I would put in writing and send it certified, return receipt so they have to sign for it and you have a paper trail.
If the losing bank has a branch that you can go to, go in and request that your IRA account be closed. Have them issue you a check for the full amount (with no tax withholding). You then have 60 days to redeposit that money in the winning bank IRA account. Otherwise, taxes and penalties, if applicable, will apply. I would deposit the losing bank check and rewrite a new check to the winning bank just so you have record of it.
You don't necessarily have to do a trustee-to-trustee transfer.
If the losing bank has a branch that you can go to, go in and request that your IRA account be closed. Have them issue you a check for the full amount (with no tax withholding). You then have 60 days to redeposit that money in the winning bank IRA account. Otherwise, taxes and penalties, if applicable, will apply. I would deposit the losing bank check and rewrite a new check to the winning bank just so you have record of it.
You don't necessarily have to do a trustee-to-trustee transfer.
NO Don't Do that...
The losing back will withhold 25% in taxes from it, you then need to make up the 25% from other sources when you deposit in the "Winning" bank. Next year (2015) when you file your taxes the 25% will be returned to you as a refund.
If the losing back does not come thru with its reason. Just go to the Branch office, and camp out in the managers office till they fix it.
If the losing bank has a branch that you can go to, go in and request that your IRA account be closed. Have them issue you a check for the full amount (with no tax withholding). You then have 60 days to redeposit that money in the winning bank IRA account. Otherwise, taxes and penalties, if applicable, will apply. I would deposit the losing bank check and rewrite a new check to the winning bank just so you have record of it.
You don't necessarily have to do a trustee-to-trustee transfer.
Thanks for the tip, but proximity is the real reason I'm leaving this bank. I moved 800 miles away from the closest branch and they won't let me make any changes to my account unless I appear in person.
The losing back will withhold 25% in taxes from it, you then need to make up the 25% from other sources when you deposit in the "Winning" bank. Next year (2015) when you file your taxes the 25% will be returned to you as a refund.
If the losing back does not come thru with its reason. Just go to the Branch office, and camp out in the managers office till they fix it.
That is so not true. You can waive out of tax withholding on IRAs.
Thanks for the tip, but proximity is the real reason I'm leaving this bank. I moved 800 miles away from the closest branch and they won't let me make any changes to my account unless I appear in person.
The majority of my banking is done with a bank that has no branches within 800 miles of me. Never even been to one of their branches.
The majority of my banking is done with a bank that has no branches within 800 miles of me. Never even been to one of their branches.
That's great! How would you handle my situation (below)?
Quote:
Originally Posted by srnyong
I have an IRA CD which is maturing in approximately 30 days. I have decided to transfer this IRA CD from one bank to another bank in which I have an IRA account already setup. I submitted my paperwork to the bank that will be receiving the funds ("winning bank") and they have verified all of my paperwork is in order and have sent over all of the paperwork to the "losing bank." The "winning bank" is a large institution with a very standard process. The "losing bank" is a much smaller financial institution, but nevertheless, a US FDIC insured bank (real bank).
Last week, the "losing bank" calls me (on the phone) directly and states, "We are denying your request to close your account." No reason given other than they don't want to do it.
I respond, "You need to respond in writing, this is not appropriate over the phone."
Bank rep, "I'll talk to my manager and see what I can do."
End of conversation.
I call the "winning bank" and tell them what just happened, that the "losing bank" called me directly to inform me that my request was denied. The "winning bank" explains to me that the "losing bank" has to respond to both myself and the "winning bank" in writing, they cannot notify me of a denial without 1) legitimate reason and 2) a written letter.
I don't get it. What was the point of the phone call from the 'losing bank'? Was the "losing bank" hoping that I would say, "Oh, that's ok, I didn't really mean it when I filled out all of the paperwork to move my money."
I have a feeling that the 'losing bank' is playing games and will neither send a letter with a legitimate reason as to why they have denied my request and will renew my IRA CD for another 5 years.
My "winning bank" has assured me they cannot legally do this, but I'm not sure what my recourse is if they do.
Have you gotten the reason for the hold up in writing?
Guessing you haven't.
Send a certified letter with what you want done with the CD. Once they receive the letter, give them a couple days. Then, call them, and ask to speak to someone in charge, until you get the answer you want.
If they still want to stonewall; remind them you've given them clear instructions which assuming you don't get something in writing from them works and you will hold them responsible if something you have instructed against happens.
It's your money.
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