BACS Transfers

Caped_Avenger

MarkyMarkD wrote:

I don't think A&L, specifically, DO "hold the money in a suspense account for an extra day" and hence "earn an extra day's interest". I think they actually just take the instruction for the BACS payment on day 1, but actually start the 3 days process (using your terminology) on day 2. So it takes a day longer for the money to arrive, but there's no more lost interest.

Funny that, because the following example (plus other examples that Dagobert has provided) prove that they do.

Dagobert wrote:

A&L -> BoS example
The transfer was scheduled for Tuesday 8th Nov. On the A&L statement, the transfer is dated 8th Nov. The amount was received in my BoS a/c on 11th Nov.

Dagobert

Caped_Avenger wrote:

MarkyMarkD wrote:

I don't think A&L, specifically, DO "hold the money in a suspense account for an extra day" and hence "earn an extra day's interest". I think they actually just take the instruction for the BACS payment on day 1, but actually start the 3 days process (using your terminology) on day 2.

Funny that, because the following example (plus other examples that Dagobert has provided) prove that they do.

Dagobert wrote:

A&L -> BoS example
The transfer was scheduled for Tuesday 8th Nov. On the A&L statement, the transfer is dated 8th Nov. The amount was received in my BoS a/c on 11th Nov.

As the money left my A&L a/c 3 days prior to arriving at BoS, who do not hold on to transferred money for an extra day, A&L must have indeed kicked off the BACS transfer the day after it came off my a/c. In other words: they must've held it in a suspense account for an extra day and hence they must have earned an extra day's interest.

Dagobert

Dagobert wrote:

in my experience banks either pay interest

• from and including day of receipt and excluding the day of withdrawal or
• from and excluding day of receipt and including the day of withdrawal

To-day, I have looked at the T&Cs of over 20 products (savings + current accounts): you get all sorts of combinations, not just the two mentioned above. Policies vary from product to product, not just from bank to bank.

For instance, the Scarborough BS pays interest from the day following receipt up to and including the day prior to withdrawl. In other words: you lose a day at both ends.

Northern Rock calculate interest on the cleared funds at the end of each day for their online tracker. (I read this as: interest on day of receipt of a BACS transfer.) And they pay interest up to and including the day of withdrawal.

Of those accounts, which don't pay interest on the day of receipt some will start paying interest on the next calendar day (e.g. A&L online saver), some on the next working day (e.g. Cahoot current a/c and A&L current a/c).

Caped Avenger: what about FirstDirect's current account? Couldn't find anything in the T&Cs.

Sadly, a lot of the T&Cs are incomplete as far as this is concerned. Some fail to mention their policy for the day of receipt, some for the day of withdrawal. Bear in mind that the T&Cs should give details for cash, cheque and BACS transactions and internal transfers.


If you want to time your BACS payments, or want to calculate days of lost interest, all these variations add a bit more complexity.

While the key facts and figures are always easy to obtain, these "hidden charges" make it almost impossible to truly compare two financial products.

Caped_Avenger

Dagobert wrote:

Caped Avenger: what about FirstDirect's current account? Couldn't find anything in the T&Cs.

Section 6.1 of the principal T&Cs deals with it, but it isn't explicit. Either way, you will receive credit interest on a transfer inwards from the day when it credits your account, and up to and including the day before a transfer is sent, but not the day when it is sent.

Dagobert

MarkyMarkD wrote:

If you transfer from an A&L current account to any linked A&L savings account, it is same-day value - I've never experienced a 3 day delay as Dagobert has. If you set up a BACS transfer to an A&L savings account from your A&L current account yourself, rather than using the "proper" inter-account transfer functionality, though, I can see how it would happen - A&L presumably don't check the sort codes of BACS transfers that are set up to see if they are other A&L accounts.

The Bank of Scotland credits transfers between accounts held by the same branch on the same day. This is the case for personal and business accounts. The accounts don't need to be linked. Payments are initiated in the usual way specifying sort code and account number. So, they must distinguish between inter-branch and external transfers automagically.

MarkyMarkD

Dagobert wrote:

My above transfer time charts count the number of working days between the day the money leaves account A and the day it arrives in account B taking the dates from the respective bank statements. To determine how much interest is actually lost, one would need to take into consideration whether the participating banks pay interest on the day of withdrawal and/or receipt.

Yes, my mistake - sorry. I did an online transfer on Tuesday and, as you say, it debited my account same day but doubtless will not arrive until Friday.

Dagobert wrote:

Indeed, my online savings account is not linked to my A&L current account.

Various other banks' online interfaces automatically link all internal bank accounts: Norwich & Peterborough, FirstDirect, Bank of Scotland/Halifax, Cahoot. I suppose, I just expected A&L to operate in the same manner.

Never a good idea to just assume anything, where banking is assumed.

Dagobert wrote:

Could you, please, explain how to use A&L's inter-account transfer functionality properly?

If you set up a new A&L savings account - like the new Online Saver issue 2 - it's normally automatically linked and then appears as "Online saver (nnnnnnnnnn)" where "nnnnnnnnn" is the account number. If it doesn't appear automatically, there's an "add new account" functionality. If that doesn't allow you to add it, I'm not sure!

Dagobert

I found this interesting posting in another thread:

exel1966 wrote:

The following link will give you all the low down on BACS system changes to be effective by 2007.

Great news for banking customers!

Milarky

Think your pasted link doesn't work. Here is it again:

http://www.fool.co.uk/news/comment/2005/c051216f.htm

Going to the APACS.org press release, on which it is based, it explains about 'same day' transfers:

http://www.apacs.org.uk/downloads/NewFasterInternetPaymentService%20-%2016Dec05.pdf

As I read it:

'Single' or one-off payments: [what we refer to here generally as 'BACS payments' I suppose] may be made 7 days a weeks

Pre-arranged 'Standing Orders': [which go by exactly the same route, I understand] will also give 'same day' value but can only be sent on a nornal bank's working day [Mon-Fr excluding bank holidays]

either way, the customer should lose no days interest - the 'float' being abolished - but the disconcerting thing is that it won't happen until the end of 2007 - another 2 years - why so long?

gizmoleeds

Milarky wrote:

either way, the customer should lose no days interest - the 'float' being abolished - but the disconcerting thing is that it won't happen until the end of 2007 - another 2 years - why so long?

"Technical issues" :rolleyes:

Caped_Avenger

Milarky wrote:

Pre-arranged 'Standing Orders': [which go by exactly the same route, I understand] will also give 'same day' value but can only be sent on a nornal bank's working day [Mon-Fr excluding bank holidays]

They do go down the same route, a Standing Order is just a repeated BACS transfer (if it is between 2 different banks, that is). So it doesn't make sense that they cannot be sent on a non-working day, if a BACS can be sent. Strange!

Milarky wrote:

either way, the customer should lose no days interest - the 'float' being abolished - but the disconcerting thing is that it won't happen until the end of 2007 - another 2 years - why so long?

The thing that concerns me is how it will affect customers. Banks can currently afford to not charge the customer for BACS transfers (the banks have to pay a subscription to BACS), because they can cover their subrscritions using the money they make off the float. Once the banks can no longer rely on this source of revenue, how will they cover their costs? Will we see a charge for transferring money?