Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post by jpapp » Fri Mar 05, 2021 3:06 pm
This has happened on 3 occasions now. We had used Prime Portfolio for decades for check writing with no issues but with the transition of that fund I understand check writing is no longer an option. So we transferred funds into our joint brokerage account settlement fund, the Federal Money market, and established check writing privileges. On two occasions we were notified that the checks weren’t accepted because of invalid account numbers, on a third occasion at our vet’s office their check verification system refused to process it.
Most of the checks we’ve written have been processed without issue fortunately, several to our mortgage company and several credit card companies. We have no idea what the issue is with the ones being rejected but this is becoming a troublesome issue. Has anyone run into something similar and how should we deal with it? We keep very little in our regular bank checking account and have always used our money market account for large payments. And prior to this settlement account never had any such issues.
bap Posts: 38 Joined: Tue Mar 04, 2014 8:24 amPost by bap » Fri Mar 05, 2021 3:12 pm
Same here.
When speaking with Vanguard rep on the phone was told they no longer have check writing privileges on these types of accounts. However, they sent checks when I requested them online so I assumed they would work. I did a test run with an institution I knew would not charge me for a returned check.
Post by jpapp » Fri Mar 05, 2021 3:16 pm
We have the checkbook also and the majority of the ones written have cleared without issue. But I have no idea how to tell what’s going on with the others.
Topic Author jpapp Posts: 32 Joined: Wed May 18, 2011 9:06 pmPost by jpapp » Fri Mar 05, 2021 3:25 pm
And the odd thing is that on the original Prime Portfolio account which is now Vanguard Cash Reserves Federal Money Market Fund, check writing is not shown as inactive, I only see options for Stop Payment and Reorder checks. But I was told by one of their reps that September 29, 2020 would be the last day checks would be paid from that account.
Svensk Anga Posts: 1754 Joined: Sun Dec 23, 2012 4:16 pmPost by Svensk Anga » Fri Mar 05, 2021 3:36 pm
I have been using ACH to move funds into my credit union checking account as needed, rather than write checks on the Vanguard mm funds. Then write checks or use bill pay out of the regular checking account. It does take a bit of planning to account for processing time. Pushing funds from VG should be faster than pulling from your bank as there should be no funds hold required. Losing a few days interest because of no check float has not been an issue for some time.
I have gotten a bit uneasy about having Vanguard checks out in the wild where fraud starts. Using the credit union checking account limits the damage potential since there is normally not much there. This is especially true if you have another fund backing up checks written on the federal money market.
galawdawg Posts: 5231 Joined: Thu Dec 14, 2017 11:59 am Location: GeorgiaPost by galawdawg » Fri Mar 05, 2021 3:46 pm
I'd imagine some of the Vanguard fans here will chime in with comments such as, "very happy at Vanguard, never needed check writing", or "difficult times with COVID and taxes, these things happen", or "Vanguard is low-cost, what do you expect" or "Vanguard isn't a bank, why are you writing checks", etc.
In my opinion, your issues are typical of what Vanguard has become over the past five years or so. a mediocre, less than competent, short-staffed and unresponsive brokerage. Add to that the curtailment of many services they once provided clients, the move of other such services to their AUM-based advisory service, their "we don't care" customer service model, and the lower-ER funds available now at Fidelity and Schwab. today's Vanguard pales in comparison to the house that Jack built. Same great mutual funds, the brokerage. not so much.
If cash management is important to you, you may wish to move your accounts to a brokerage that offers that. If you hold ETFs, Fidelity and Schwab are the two most frequently recommended here. If you hold mutual funds, E*TRADE and Chase YouInvest charges no transaction fees on most Vanguard mutual funds. If your portfolio is $250k or more, Schwab will reportedly waive transaction fees on mutual funds for one fund family (such as Vanguard), you could call or email a local office to talk with them about that.
Sorry to hear of your difficulties, good luck in deciding how to deal with the mess!
RudyS Posts: 2850 Joined: Tue Oct 27, 2015 10:11 amPost by RudyS » Fri Mar 05, 2021 3:58 pm
I have checkbooks for a trust account, for my IRA, and a brokerage joint account. All checks say that they are written on "Vanguards Brokerage Services Account". The account number is what directs them to the correct account. Any definition of what fund they draw on is in the account information. All draw against the Settlement Federal Reserves Money Market account, with Cash Reserves being listed as alternate redemption fund. I have never had a check not honored.
Topic Author jpapp Posts: 32 Joined: Wed May 18, 2011 9:06 pmPost by jpapp » Fri Mar 05, 2021 4:04 pm
galawdawg wrote: ↑ Fri Mar 05, 2021 3:46 pm
Sorry to hear of your difficulties, good luck in deciding how to deal with the mess!
Thanks. I’d just like an explanation of why some of the checks are processed while these others aren’t. I suspect it’s some kind of software issue that the companies use to verify accounts. That happened right in front of us at our vet’s office, but the other two were checks that were given to technicians who were doing expensive repairs at our house. A month or so later we get notified that the bill is still due and the checks we used were tagged with invalid account numbers. The others, successful checks, were mailed in to our mortgage company, CC company, real estate taxes etc., without issue. I don’t know how to track this down.
Topic Author jpapp Posts: 32 Joined: Wed May 18, 2011 9:06 pmPost by jpapp » Fri Mar 05, 2021 4:13 pm
RudyS wrote: ↑ Fri Mar 05, 2021 3:58 pm I have never had a check not honored.My guess is that the checks aren’t even getting to Vanguard’s clearing service but are somehow being verified by some service or software that can’t verify the account number. Otherwise it doesn’t make sense why there are no problems with some of them but issues with the others.
galawdawg Posts: 5231 Joined: Thu Dec 14, 2017 11:59 am Location: GeorgiaPost by galawdawg » Fri Mar 05, 2021 4:38 pm
jpapp wrote: ↑ Fri Mar 05, 2021 4:04 pmgalawdawg wrote: ↑ Fri Mar 05, 2021 3:46 pm
Sorry to hear of your difficulties, good luck in deciding how to deal with the mess!
Thanks. I’d just like an explanation of why some of the checks are processed while these others aren’t. I don’t know how to track this down.
Did you contact Vanguard? Secure message is probably best. I would be pleasantly surprised if you receive an informed answer that helps you avoid this in the future. My experiences with Vanguard over the past few years finally drove me away after thirty plus years as a loyal client-owner. I hope your experience is different. Keep us posted if you decide to follow-up with Vanguard!
FIREchief Posts: 6916 Joined: Fri Aug 19, 2016 6:40 pmPost by FIREchief » Fri Mar 05, 2021 4:45 pm
galawdawg wrote: ↑ Fri Mar 05, 2021 3:46 pm I'd imagine some of the Vanguard fans here will chime in with comments such as, "very happy at Vanguard, never needed check writing", or "difficult times with COVID and taxes, these things happen", or "Vanguard is low-cost, what do you expect" or "Vanguard isn't a bank, why are you writing checks", etc.
In my opinion, your issues are typical of what Vanguard has become over the past five years or so. a mediocre, less than competent, short-staffed and unresponsive brokerage. Add to that the curtailment of many services they once provided clients, the move of other such services to their AUM-based advisory service, their "we don't care" customer service model, and the lower-ER funds available now at Fidelity and Schwab. today's Vanguard pales in comparison to the house that Jack built. Same great mutual funds, the brokerage. not so much.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.
Katietsu Posts: 7797 Joined: Sun Sep 22, 2013 1:48 amPost by Katietsu » Fri Mar 05, 2021 4:47 pm
jpapp wrote: ↑ Fri Mar 05, 2021 4:13 pm RudyS wrote: ↑ Fri Mar 05, 2021 3:58 pm I have never had a check not honored.My guess is that the checks aren’t even getting to Vanguard’s clearing service but are somehow being verified by some service or software that can’t verify the account number. Otherwise it doesn’t make sense why there are no problems with some of them but issues with the others.
I do not know anymore than you. But, when I read your original post, this is what I thought of too. Topic Author jpapp Posts: 32 Joined: Wed May 18, 2011 9:06 pmPost by jpapp » Fri Mar 05, 2021 4:51 pm
I did post a secure message on my account page just today. But I thought I might get more relevant help from some here who may have run into this. If we know a major expense is upcoming we can arrange for a transfer back to our bank account. But when emergencies occur, and I don’t want to add any more to a credit card, we use the money market account. Now I’ll never know whether the check is going to go through or not. We had an emergency gas issue in our apartment beach in January, paid the tech with one of the checks and though everything was ok but today get an invoice from them that the bill was still due. Called and was told it was flagged as invalid account number. The phone rep apologized thinking that someone may have entered the account number incorrectly. But since this has happened twice before I don’t believe the issue was on their end.
ballons Posts: 782 Joined: Sun Aug 18, 2019 3:05 pmPost by ballons » Fri Mar 05, 2021 5:22 pm
jpapp wrote: ↑ Fri Mar 05, 2021 4:04 pm Thanks. I’d just like an explanation of why some of the checks are processed while these others aren’t. I suspect it’s some kind of software issue that the companies use to verify accounts. That happened right in front of us at our vet’s office, but the other two were checks that were given to technicians who were doing expensive repairs at our house. A month or so later we get notified that the bill is still due and the checks we used were tagged with invalid account numbers. The others, successful checks, were mailed in to our mortgage company, CC company, real estate taxes etc., without issue. I don’t know how to track this down.
jpapp wrote: ↑ Fri Mar 05, 2021 4:51 pm We had an emergency gas issue in our apartment beach in January, paid the tech with one of the checks and though everything was ok but today get an invoice from them that the bill was still due. Called and was told it was flagged as invalid account number. The phone rep apologized thinking that someone may have entered the account number incorrectly. But since this has happened twice before I don’t believe the issue was on their end.
You mean they manually entered the account number off the check and who told the merchant it was "invalid?" This sounds like a processing error by a third party because these merchants aren't coming after you for a bad/returned check.
Broken Man 1999 Posts: 8833 Joined: Wed Apr 08, 2015 11:31 am Location: West coast of Florida, near Champa Bay !
Post by Broken Man 1999 » Fri Mar 05, 2021 5:41 pm
I have written checks on my settlement account for my TIRA for a long time, and have never had any that caused issues. And I have written some big ones over the years. And the checks have been a mixture of those written to large companies, and those written to family members, IOW a variety.
The fact that some checks go thru, and some do not seems to me to point elsewhere, I think if it were a Vanguard issue there would be far more posts about such a problem.
There have been posts about checks not being honored when they changed the MM funds lineup, but this is not the same issue.
Good luck in your search for the answer.
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain UpperNwGuy Posts: 9884 Joined: Sun Oct 08, 2017 7:16 pmPost by UpperNwGuy » Fri Mar 05, 2021 5:44 pm
My opinion:Post by Bama12 » Fri Mar 05, 2021 5:46 pm
UpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
Post by jpapp » Fri Mar 05, 2021 5:48 pm
You mean they manually entered the account number off the check and who told the merchant it was "invalid?" This sounds like a processing error by a third party because these merchants aren't coming after you for a bad/returned check.
I believe it’s a 3rd party verification system or service that is not identifying the account number. The checks that we have mailed in to our mortgage company, county utilities agency, credit card company, etc. have not had an issue. But other than continuing the checks with those companies and using a credit card for everything else I don’t know what to do. With the previous Prime MM checks we never had issues but the verification process may be different now.
LadyGeek Site Admin Posts: 98639 Joined: Sat Dec 20, 2008 4:34 pm Location: Philadelphia Contact:Post by LadyGeek » Fri Mar 05, 2021 6:02 pm
I removed an off-topic interchange. As a reminder, see: General EtiquetteWe expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.
. At all times we must conduct ourselves in a respectful manner to other posters. Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
earflop Posts: 106 Joined: Fri Sep 20, 2019 5:34 pmPost by earflop » Fri Mar 05, 2021 6:30 pm
UpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
Not to get too off topic, but this is why I originally chose Charles Schwab for my investment accounts. They are a full featured brokerage and also a full featured (online) bank. The divisions complement each other but are also appropriately separated. Their checking account is fantastic and transfers between checking and brokerage are instant.
I believe Fidelity has similar advantages.
sport Posts: 12283 Joined: Tue Feb 27, 2007 2:26 pm Location: Cleveland, OHPost by sport » Fri Mar 05, 2021 6:36 pm
UpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
I cannot write QCD checks from my bank. The law provides only two options for a Vanguard IRA.
1. Vanguard writes the check.
2. I write a Vanguard check.
Electronic transfers are not available; it must be a paper check.
Post by friar1610 » Fri Mar 05, 2021 8:03 pm
sport wrote: ↑ Fri Mar 05, 2021 6:36 pmUpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
I cannot write QCD checks from my bank. The law provides only two options for a Vanguard IRA.
1. Vanguard writes the check.
2. I write a Vanguard check.
Electronic transfers are not available; it must be a paper check.
Just speaking for myself, I wouldn’t want to do QCDs any other way. I want tangible proof in my file at home that it was indeed a QCD and not a taxable distribution.
Friar1610 | 50-ish/50-ish RudyS Posts: 2850 Joined: Tue Oct 27, 2015 10:11 amPost by RudyS » Fri Mar 05, 2021 8:42 pm
Bama12 wrote: ↑ Fri Mar 05, 2021 5:46 pmUpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
Except that QCDs come out of my IRA (brokerage) account. I could go to the trouble of requesting VG to write such checks, and I forward them, but I'd rather just write a check and send it to the charity. The check and the acknowledgement are all the proof I need that it's a QCD
sport Posts: 12283 Joined: Tue Feb 27, 2007 2:26 pm Location: Cleveland, OHPost by sport » Fri Mar 05, 2021 8:55 pm
RudyS wrote: ↑ Fri Mar 05, 2021 8:42 pm Bama12 wrote: ↑ Fri Mar 05, 2021 5:46 pmUpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
Except that QCDs come out of my IRA (brokerage) account. I could go to the trouble of requesting VG to write such checks, and I forward them, but I'd rather just write a check and send it to the charity. The check and the acknowledgement are all the proof I need that it's a QCD
I have the mutual fund platform for my IRA. I have checks on a MM fund in the IRA. They are imprinted "not valid for less than $250". So, I use those checks for amounts of $250 or more and I let Vanguard write the checks for lesser amounts.
RudyS Posts: 2850 Joined: Tue Oct 27, 2015 10:11 amPost by RudyS » Fri Mar 05, 2021 9:19 pm
sport wrote: ↑ Fri Mar 05, 2021 8:55 pm RudyS wrote: ↑ Fri Mar 05, 2021 8:42 pm Bama12 wrote: ↑ Fri Mar 05, 2021 5:46 pmUpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
Except that QCDs come out of my IRA (brokerage) account. I could go to the trouble of requesting VG to write such checks, and I forward them, but I'd rather just write a check and send it to the charity. The check and the acknowledgement are all the proof I need that it's a QCD
I have the mutual fund platform for my IRA. I have checks on a MM fund in the IRA. They are imprinted "not valid for less than $250". So, I use those checks for amounts of $250 or more and I let Vanguard write the checks for lesser amounts.
That works too. Since I itemize nowadays, the net difference from using QCD is small. (I do know about IRMMA).
sport Posts: 12283 Joined: Tue Feb 27, 2007 2:26 pm Location: Cleveland, OHPost by sport » Fri Mar 05, 2021 10:09 pm
RudyS wrote: ↑ Fri Mar 05, 2021 9:19 pm sport wrote: ↑ Fri Mar 05, 2021 8:55 pm RudyS wrote: ↑ Fri Mar 05, 2021 8:42 pm Bama12 wrote: ↑ Fri Mar 05, 2021 5:46 pmUpperNwGuy wrote: ↑ Fri Mar 05, 2021 5:44 pm My opinion:
— Do banking at banks.
— Do investing at brokerages.
— Don't seek all-in-one solutions.
Except that QCDs come out of my IRA (brokerage) account. I could go to the trouble of requesting VG to write such checks, and I forward them, but I'd rather just write a check and send it to the charity. The check and the acknowledgement are all the proof I need that it's a QCD
I have the mutual fund platform for my IRA. I have checks on a MM fund in the IRA. They are imprinted "not valid for less than $250". So, I use those checks for amounts of $250 or more and I let Vanguard write the checks for lesser amounts.
That works too. Since I itemize nowadays, the net difference from using QCD is small. (I do know about IRMMA).
QCDs also reduce my state income taxes as well as IRMAA. Itemized deductions would not. pfrank Posts: 209 Joined: Thu Jan 15, 2009 8:42 amPost by pfrank » Sat Mar 06, 2021 7:47 am
jpapp wrote: ↑ Fri Mar 05, 2021 4:04 pmgalawdawg wrote: ↑ Fri Mar 05, 2021 3:46 pm
Sorry to hear of your difficulties, good luck in deciding how to deal with the mess!
Thanks. I’d just like an explanation of why some of the checks are processed while these others aren’t. I suspect it’s some kind of software issue that the companies use to verify accounts. That happened right in front of us at our vet’s office, but the other two were checks that were given to technicians who were doing expensive repairs at our house. A month or so later we get notified that the bill is still due and the checks we used were tagged with invalid account numbers. The others, successful checks, were mailed in to our mortgage company, CC company, real estate taxes etc., without issue. I don’t know how to track this down.
I used check writing with Prime MM for years without issues. I have had no issues with my new checks on the settlement fund.
It’s odd that some are accepted and others rejected. We’re the rejected checks for more than the $250 minimum?
Topic Author jpapp Posts: 32 Joined: Wed May 18, 2011 9:06 pmPost by jpapp » Sat Mar 06, 2021 8:12 am
I used check writing with Prime MM for years without issues. I have had no issues with my new checks on the settlement fund.
It’s odd that some are accepted and others rejected. We’re the rejected checks for more than the $250 minimum?
Yes they were all over $250. But that’s not written on the checks anymore. I do believe it’s some verification service that isn’t working properly with these checks. At the vet’s office they told us right there that it wasn’t being verified or accepted. The other two had been given to repair people at the time of service in my apartment. When we got a bill in the mail later I called and each time they apologized thinking one of their people had entered the account number incorrectly. Each told me that they had a flag that it was an invalid account number.
I have seen at some businesses a sign either at the counter or on a window that checks are subject to verification by some service. My guess is that the particular service is unable to verify accounts through brokerage services. The checks that we physically mailed in as payments - our mortgage, credit card payment, county, state, and federal tax payments - have not had an issue. The problem is that we have no way of knowing ahead of time what verification method a company or business uses. Vanguard itself may not be aware of the problem since the check never actually gets to them.
NYCaviator Posts: 2552 Joined: Sat Apr 09, 2016 5:06 pm Location: NYCPost by NYCaviator » Sat Mar 06, 2021 8:34 am
jpapp wrote: ↑ Sat Mar 06, 2021 8:12 amI used check writing with Prime MM for years without issues. I have had no issues with my new checks on the settlement fund.
It’s odd that some are accepted and others rejected. We’re the rejected checks for more than the $250 minimum?
Yes they were all over $250. But that’s not written on the checks anymore. I do believe it’s some verification service that isn’t working properly with these checks. At the vet’s office they told us right there that it wasn’t being verified or accepted. The other two had been given to repair people at the time of service in my apartment. When we got a bill in the mail later I called and each time they apologized thinking one of their people had entered the account number incorrectly. Each told me that they had a flag that it was an invalid account number.
I have seen at some businesses a sign either at the counter or on a window that checks are subject to verification by some service. My guess is that the particular service is unable to verify accounts through brokerage services. The checks that we physically mailed in as payments - our mortgage, credit card payment, county, state, and federal tax payments - have not had an issue. The problem is that we have no way of knowing ahead of time what verification method a company or business uses. Vanguard itself may not be aware of the problem since the check never actually gets to them.
I know Vanguard will shut down check writing if you don't use it after a while. Happened to a friend who hadn't written a check in years and then wrote one which was declined. They had to call Vanguard and get check writing reinstated. I'm guessing its for security purposes. It doesn't sound like that's what's happening with you if the mailed in checks work.
Though I agree with the poster above to use a bank for banking. It sounds like you are regularly writing checks on your Vanguard account; the potential for fraud seems huge if you are giving checks to repair people and vets. It would really worry me if I had significant assets in there. Get a separate checking account to serve as a firewall between your big assets and your cash.
