Word of warning re. ING Direct & other online savings accounts

Bogof_Babe · 8 October 2005 at 7:32PM

I opened an ING Direct account for my husband last week, as the interest rate is 4.75% which is much better than he was getting elsewhere. ING Direct have been more than helpful and efficient, so this is not a gripe against them.

However when the cheque came through to close his previous account, he went straight down to pay it into his current account at Lloyds, as this is how ING Direct work - everything goes via a Direct Debit agreement, linked to a current account.

When he had done that, I went online to transfer the money from his current account into his ING Direct account. I thought that was all done and sorted.

But - he had a letter from Lloyds yesterday, saying he was trying to "draw" an amount in excess of his current account balance, and threatening to charge £30 for the notification and £35 for every extra day the situation remained (???). They had dishonoured the direct debit transfer, even though the cheque was sitting in their system somewhere.

This is a long-winded way of saying - if anyone else is operating a savings account that runs on this basis, please do remember to allow time for the money paid into your bank current account to clear, before instructing your savings account provider to draw it.

If I find that Lloyds have deducted £30 or more, I will be down there spitting fire, as he has been an excellent customer there for over 30 years!

Walletwatch · 8 October 2005 at 7:42PM

I am sorry, but are you saying that you tried to transfer an amount from Lloyds TSB (presumably the account you have linked to ING) the same day as you deposited the chq into Lloyds TSB? If yes, how can you do that? and how do you expect Lloyds to release the money to ING when they themselves do not have access to the money?

You must have cleared funds in any account before you try to transfer money from that account to any other bank account. It is as simple as that, and no bank is going to honor a direct debit and not levy you charges if you do not have adequate funds in your account to honor the direct debit. Not even if you've been banking with them for 300 years, no!

Bogof_Babe · 8 October 2005 at 7:59PM

Yes I know, it was a really stupid thing to do. I am probably the stupidest person who ever posted on this board.

I just thought it might be worth passing on, as a caution to anyone else who might overlook the fact that, although the money belongs to the account holder, upon moving it around there is a few days during which time it apparently does not belong to them!

It's one of those mistakes that you only make once in a lifetime, but I was stupid enough to make it. Guilty as charged.:o

YorkshireBoy · 8 October 2005 at 8:08PM

When you initiate the transfer on the ING site, you are prompted to "ensure that your external account has sufficient cleared funds".

If you bank online, most internet banking systems let you see your cleared balance on screen. You could have checked this prior to initiating the transfer, or called the branch to check.

I'd stay away from Lloyds if I were you, and certainly wouldn't go in there "spitting fire", as it's clearly your mistake.

Maybe you didn't understand that cheques take 3/4/5 days to clear? Time to get your current account T&C's out and have another read perhaps?

When you've calmed down, and if you've been with them for "over 30 years", then maybe a polite request to the branch manager, asking him to review the charges might bring about a satisfactory resolution?

Bogof_Babe · 8 October 2005 at 8:19PM

Yes I know, and I am still in the sackcloth and ashes for being so un-savvy.

Re. online banking - I actually opened myself an ING Direct account too, and only yesterday I paid a cheque from my ex-savings account into NatWest, which is today showing on my online a/c balance.

Now once bitten, etc., but as it is showing in my c/a, I might assume that means it is available?

I've diaried myself to leave it until Tuesday to instigate the direct debit, but I'm sure you can see how these things happen if you don't keep your eye on the ball. The difficulty is knowing how many days interval to allow.

My husband has a decent amount of savings deposited in a Lloyds a/c too, so I think we might be in a good bargaining position if push comes to shove.

YorkshireBoy · 8 October 2005 at 8:30PM

Bogof_Babe wrote:

I've diaried myself to leave it until Tuesday to instigate the direct debit, but I'm sure you can see how these things happen if you don't keep your eye on the ball. The difficulty is knowing how many days interval to allow.

I would never "guess" how many days a cheque takes to clear. The only way to be sure is to phone the branch to confirm a cheque has cleared or go online to see if it is actually showing as cleared funds.

All banks will be different, and with my own I know if I pay a cheque in on the Monday it will not clear until the following Friday. ie, I have to allow 3 clear working days, not including the day of deposit and the day it clears.

Edited to say...

Finally, even when your money lands at ING, although it shows on your balance and starts earning interest straight away, it is "quarantined" for 3 days until it clears with ING - which means if you change your mind and try to bring it back to Lloyds again you can't!

jonesMUFCforever · 8 October 2005 at 8:47PM

This business of uncleareds is the only drawback that I can see on the LTSB site. The rest is easy to use but they only show ledger balances not cleared balances. Don't know why this should be so as this information is freely available when you ask the ATM for a balance.
Eric

charlieboycat · 8 October 2005 at 10:26PM

YorkshireBoy wrote:

All banks will be different, and with my own I know if I pay a cheque in on the Monday it will not clear until the following Friday. ie, I have to allow 3 clear working days, not including the day of deposit and the day it clears.

One up to NatWest - if I pay a cheque in on a Monday it becomes "available" (using their online terminology) for transfer to eSavings, BACS to elsewhere, or withdrawal by direct debit on the Wednesday.

YorkshireBoy · 8 October 2005 at 10:43PM

charlieboycat wrote:

One up to NatWest - if I pay a cheque in on a Monday it becomes "available" (using their online terminology) for transfer to eSavings, BACS to elsewhere, or withdrawal by direct debit on the Wednesday.

I'm no banking expert, but is this something to do with NatWest being a clearing bank?

By the way, your "warp-speed" clearance reminds me of my recent ING===>current account transfer. I initiated it from the ING site on Monday morning at 11:30 and it was in my current account at 01:00 hours on Wednesday - just over 36 hours!!

Milarky · 8 October 2005 at 11:20PM

Walletwatch wrote:

You must have cleared funds in any account before you try to transfer money from that account to any other bank account. It is as simple as that, and no bank is going to honor a direct debit and not levy you charges if you do not have adequate funds in your account to honor the direct debit. Not even if you've been banking with them for 300 years, no!

Don't I remember reading somewhere [and posting on this site] that Lloyds can actually 'clear' their own cheques internally [i.e. between their customers] on the same day? A bit off topic but what if ING banked with Lloyds - a customer could simply pay a cheque directly into a branch and no problem and no waiting. Alternatively, the poster could have simply sent the cheque in the post, and it would clear in about the same period..

http://www.ingdirect.co.uk/html/aboutsavings/faqs.html#deposits

17. How do I make ongoing deposits or transfer funds from a non linked external account?
You can make ongoing deposits into your account 24 hours a day by using our interactive telephone banking service or by using the internet. Why not set up a Regular Saver to take the hassle out of saving regularly? To do this, call Customer Services on 0845 603 8888. Our lines are open Monday-Friday 7am - 11pm, Saturday-Sunday 9am-9pm.

You can also send cheques to us, made payable to yourself. Please write your account number on the front of the your cheque, after your name. In addition, you can transfer money electronically from an external account that is not linked to your ING Direct Savings Account.

Sort Code: 40-61-98
Account Number: Please quote your account number, not your customer number
Address: ING Direct
Freepost NATW1784
Reading
RG6 1BR

Hmm! '40', isn't that an HSBC sort code? [Looks like paying a cheque into Lloyds here would not help.] Actually, their sort code comes back as:

ING BANK NV
bank address
560 Thames Valley Park
READING
Berkshire
RG6 1RA

So, evidently not simply an HSBC collection account as I'd assumed

On another point, though, I understand that Barclays allow customers to draw on cheques immediately - but at their 'own risk' that the cheque ulimately clears. Can anyone confirm if this is accurate?

YorkshireBoy · 8 October 2005 at 11:41PM

Milarky wrote:

On another point, though, I understand that Barclays allow customers to draw on cheques immediately - but at their 'own risk' that the cheque ulimately clears. Can anyone confirm if this is accurate?

It appears so, although the T&C's are not "perfectly" clear.

See Section 4. Credits to and payments out of your account at...

http://www.barclays.co.uk/importantinfo/cust_agree.html

Word of warning re. ING Direct & other online savings accounts

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