Banking question

Off_it

Years ago when aside from cash you could only really pay for something by cheque the payment would normally take "three or four days" to clear. This was understandable as the cheque had to physically go to a clearing house, onto your bank, etc, and some monkey was sitting there at each stage in the line crediting one account and debiting another.

These days everything is done electronically so, in theory, can be done much more quickly.

So how is it that when I transfer money from one account to another it still takes "three or four days" to clear. The money immediately leaves the account I am transferring it from - so I can't spend it any longer, even though it's mine! - but doesn't arrive in my other account for some time, so where does it go, and more importantly, who's getting the interest/benefit of this cash for the "three or four days"???

WSS

[cite]Posted By: Off_it[/cite]who's getting the interest/benefit of this cash for the "three or four days"???

Andrew Mills and/or Henry Irving

Stu_of_Kunming

The banks are getting the money, I'd imagine.

Ketman

To answer your question when you do a bank transfer inter-bank or bank to bank it is done via Bacs. Bacs is not same day clearance it is three days. The only things that clear your account same day is when you pay Cash directly into an account or if you arrange a Chaps same day payment for which there is a hefty charge.

As for the interest not 100% sure, but you select to transfer on Day One, Bacs Tape is transmitted on Day Two received agreed & cleared on Day Three. So probably both banks to a certain degree if transferring between two of them.

Charlton Dan

Your bank will use this as "free money" and use it to invest in something making a small return on it.... However if you think that they do that with every transaction then these small returns become big profits

Off_it

[cite]Posted By: Ketman[/cite]To answer your question when you do a bank transfer inter-bank or bank to bank it is done via Bacs. Bacs is not same day clearance it is three days. The only things that clear your account same day is when you pay Cash directly into an account or if you arrange a Chaps same day payment for which there is a hefty charge.

As for the interest not 100% sure, but you select to transfer on Day One, Bacs Tape is transmitted on Day Two received agreed & cleared on Day Three. So probably both banks to a certain degree if transferring between two of them.

But that's the point Ketman, why does a BACS payment take three days when it's all automated (hence the "A" in BACS)

You've hit the nail on the head though. The reason it takes so long is so that
a) both banks profit from the delay by having your money that you cannot get access to; and
b) if you want something done as quickly as they can do it you have to pay a hefty fee. So if they made BACS payments as quickly as they easilly can do they would lose out on two counts.

THE DIRTY MONEY GRABBING B*****DS!!!!

Rothko

That's why I'm not with a bank, money grabbing swines

Charlton Dan

Kets - The payment is actioned at the touch of a button. Just like with a debit card transaction in Tesco.

These days money does not physically change hands like it used to therefore, despite what the bank tells you about clearing etc, it is done almost immediately

Off_it

[cite]Posted By: CharltonDan[/cite]These days money does not physically change hands like it used to therefore, despite what the bank tells you about clearing etc, it is done almost immediately

It's done, but then sits there waiting to "clear" - which is technical speak for them having a little flutter with it!

Red Riding Hoodie

I had this arguement with my bank years ago when they refused my mortgage direct debit as there were insufficent funds - despite my statement showing the money was in the account! I pointed out that there was nothing in the paperwork I'd signed that highlighted that it took 3 days for the money to transfer, and suggested that my statement wasn't worth the paper it was written on and accused it of being fraudulent ("it says it's there but you're telling me it isn't ...."). Apparently they backdate the credited money to take into account interest ....

I must have fought my case well as they relented in Round One and paid back my unpaid direct debit charges!

Off_it

[cite]Posted By: Red Riding Hoodie[/cite]
I must have fought my case well as they relented in Round One and paid back my unpaid direct debit charges!

Nah, they probably just bricked it and coughed up so as to avoid setting a precedent - THE SCHEMING SCHYSTERS!

(Good on you though, always nice to see the little man striking back!)

Red Riding Hoodie

(Good on you though, always nice to see the little man striking back!)[/quote]

Or in this case, little woman!!! And not only did they pay back the Mortgage charge, as my rent had been refused too (were shared ownership at the time) they paid that one too!!!