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! <Rant over> 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
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.
To email, substitute .nospam with .gl
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.
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.
School of Life Sciences, University of Dundee, Scotland
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.
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.
(anti-spam is as easy as 1-2-3 - not)
The banks are also meeting (pandering to?) the needs of customers who
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
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
n Person you gave the cheque to gets his money.
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
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.
Tony Bryer SDA UK 'Software to build on' http://www.sda.co.uk
Free SEDBUK boiler database browser
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 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
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
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