Cash Availability Policy, Myth and Reality
Newly deposited cash is not available for withdrawal for 11 business days, but is immediately available to buy stock.
What would happen if account had some cash in it for more than 11 days ("old cash") and some newly deposited cash ("new cash")?
I had this situation, and purchased stock. I asked the question whether they would allocate old or new cash to the purchase, and was told the new cash is used first.
So I wrote a check to draw out most of the old cash. BOUNCE!! Turns out the old cash is used first for stock purchase. Further turns out they don't log customer service calls, and I didn't happen to save the name of the source of misinformation.
E*TRADE is rebating the bounced check fee. And I am trying to get a letter from them in the hope of persuading the recipient of the check to waive their fee.
This may happen twice on the same check, as E*TRADE will not honor the check before August 30. If recipient quickly redeposits... (I did call to alert them, but they have no way to intercept the bounced check)
Still happy with E*TRADE. Now a little more educated about what I can and cannot do with my account there.
