OT but has anyone found a way to beat the bank scam of holding onto, - sorry "clearing" cheques? I paid some cheques in last Thurs (first thing) and they haven't cleared yet - well because of the bank holiday of course and they naturally switch off all their computers then as it's not a "working day" and of course they wouldn't dream of collecting interest on ones money while they are busy "clearing" it would they! They must be BARCing mad :-)
This of course, is one of the biggest scams in existence - they put the money on the overnight market.
One thing that I do is to use BACS as much as possible. I ask anybody that is paying me money to use it where I can; and on payments do everything by BACS transfer. I write very few cheques nowadays and generally won't do business with people that are not geared up to accept it. Most sensible businesses can do it and will supply bank details.
Since it is alleged that BACS takes a working day less, it does at least mean that I can schedule payments a day later and thus hold on to funds a little longer on the output side.
Another thing that I do in some cases where a supplier advertises the same pricing for a cash or a credit card payment, is to negotiate a
2-3% discount for a payment by BACS. This is generally if I am going to do business with them more than once or am less concerned about Consumer Credit Act protection for purchases via credit card..andy
To email, substitute .nospam with .gl
I find paying bills on line is very efficient - the money leaves my account on the same day!
Oh, "... paid cheques in ..." you said? What's that, then? Some new technique I have yet to discover .. ;o)
Get yourself an account with one of the banks that allows you to draw money on cheques before they have cleared. Barclays do this for eg. This means that if you are sure the cheques are good, you are then free to take the risk that they may not be.
Peter
Change your bank. My bank allows me to draw on cheques as soon as they are paid in. You've got to trust that they will eventually clear, though, or you'll be stuck when they bounce. Electronic transfers happen instananeously, if the other bank doesn't hold on to the money artificially.
Christian.
Errr, no, THEY aren't BARCing mad, they're the ones making the money and are all too sane! I seem to remember when I were a lad and listened to my parents discussing bank accounts that it took 2-3 working days for a cheque to clear (when the system was manual). Now it be computertated it takes up to 8 days. Go figure.
Yes - my understanding is that funds from a cheque are guaranteed no to leave your account for two working days, usually three, after being paid in unless the recipient uses the same bank and branch as you.
This is because the cheque physically moves about i a central system. If paid in by 3:30pm it is transported overnight to the bank's clearing (usually in London) arriving in the early hours. They are sorted, boxed by bank and taken to a central exchange where the banks swap boxes of cheques (which is why your own bank is quicker and potentially, if using the same branch, the funds can go the next day). Cheques now processed by your bank. This is when the banks update records formally and is the earliest it can leave your account. Since there is a good chance your cheque doesn't make it to the bank for 3:30 p.m. then it usually takes three days. If the person getting the cheque uses your branch the branch can bypass the central clearing system.
I.e.
Day Event
1 Write cheque. Depositied into bank at end of day 2 Send to central clearing 3 Sent to your bank. Bank cheques details. Your bank updates your account. Other bank gets money. 4+ Other bank holds onto your money for as long as they can get away with n Person you gave the cheque to gets his money.A.
Don't get me started on the dear old H*l*f*x. That's where I got the 8 days from (and many other delightful examples of the benefits of demutualisation). Suffice it to say I have severed my ties with that organization.
The funds may leave your account when you hit the 'go' button but when do they reach the payee?
On another tack, I have two Halifax accounts; one purely web based which shows the debit the instant I authorise it, the other is a high street account that I can reach via the web. When I authorize a transfer from that account the available balance drops but the funds are not transferred for 2 or 3 working days - shades of cheque clearance methinks.
Richard
Sounds suspiciously like cross firing. Do you earn interest on the uncleared amount?
Richard
The detailed procedures of how both electronic transfers of money take place, and how cheques are dealt with are the subject of an article in the June 2003 issue of Which? magazine. It also lists the worst and best (?) banks. Interestingly the banks make money out of putting your money into a black hole (their own suspense account) for a day if you make an electronic transfer, but not if money is transferred by cheque. In the latter case, on day 3 of the process, one account is debited and the other credited simultaneously, and although the recipient may not be permitted to draw the money at that stage it does start to earn interest.
Of course at present interest rates that's hardly a big deal.
Chris Ward.
Chris Ward wrote | Interestingly the banks make money out of putting | your money into a black hole (their own suspense account) ... | Of course at present interest rates that's hardly a big deal.
A few tens of millions on deposit at inter-bank overnight rates is worth rather more to the bank than a third of a farthing they pay on the typical current account.
Owain
There's always Smile, or one of the other online banks. Alliance & Leicester pay decent interest on current accounts and maintain a high street presence.
With TSB it used to be the case that a cheque written on a business account and paid across the counter into my personal account would instantly be shown as cleared funds. Then they introduced their new improved service and it now takes 3 days. It's the same with Nationwide: business cheque paid into personal account takes 3 clear days: do it today, can draw cash next Thursday.
Pass, don't know where the terms and conditions leaflet detailing it is either. I suspect they won't. My understanding is that it is sort of like an interest free advance from the bank with you the customer taking the risk that the principle will be quickly repayable.
Peter
It's how you pay for "free" banking. The banks put your money in a holding fund which they are free to invest. That's why banks are rich.
Don't forget though that you should find that the funds are credited to your account immediately, but are not available for withdrawl until they are cleared. The result is that you have not lose any interest whilst it is clearing.
D
What interest? ;-)
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