A negative cash balance can happen when a banking institution rejects a deposit and pulls back the funds.

It can sometimes take up to seven business days for a bank to notify Wealthsimple about a rejected deposit. In the meantime, you may have invested funds in your account that aren't actually there.

Fix a negative cash balance in your account

There are two ways to fix a negative cash balance:

1. Sell enough of your crypto to cover the cash balance that you owe
2. Resolve the issue with your bank and resubmit your deposit

If you still have a negative cash balance five business days after we've notified you, we may liquidate some of your recent crypto purchases to cover the amount owing. In cases where there is a large balance owing, we may liquidate some of your recent crypto purchases before the five day period.

How does liquidation work?
In the event that we need to liquidate some of your crypto to cover the negative cash balance in your account, we’ll start with the most recent ones you’ve purchased.

We’ll only sell enough to cover the full cash balance that you owe. If there is any extra cash left over from the sale, it will get added to the cash balance in your account.

Reasons for a rejected deposit

There are several reasons why a bank might reject a deposit:

• There were not enough funds available in your bank account to complete the deposit
• The funds in your bank account were under a clearing period and couldn’t be moved
• You exceeded the daily debit limit for your bank account
• The account was frozen by your bank
• You requested the funds be returned to your bank account
• You tried to deposit from something other than a chequing or savings account
• You tried to deposit from a closed account
• You tried to deposit from an account holding foreign currency
• Your banking institution is in default
• Your bank identification number isn't valid
• Your bank account number does not match the institution and transit number
• The name on your bank account does not match the name on your Wealthsimple account

If you’re not sure why a deposit was rejected, we recommend contacting your bank.