Direct Debits coming out early

Misty_Blue

I have several Direct Debits on my main current account, set up to come out after payday. I get paid by the 30th of the month at the latest (earlier if the 30th falls on a weekend.) My biggest Direct Debit is set to go out on the 1st of the month - ie tomorrow. When checking my online banking on this weekend, I noticed this DD had come out on Saturday 29th. :rolleyes: As it happens, there was enough in the account to cover it, but what if there hadn't been? No doubt the bank would now be charging me for the failed DD and for going over my overdraft limit.

My understanding was that DDs come out on the day they're set up to, or the NEXT working day if that day falls on a weekend. Not two days before they're supposed to. Have I got this wrong? Would I be better moving the DDs to a little later in the month just for safety's sake?

masonic

What date does your statement show the money as having been debited?

Misty_Blue

The date showing for the money to have gone out is December 1st, but the balance showed it as having gone on the 29th.

olly300

Misty_Blue wrote: »

The date showing for the money to have gone out is December 1st, but the balance showed it as having gone on the 29th.

Then what's the problem?

This is a regular payment so the money has been ear marked for it on Friday anyway.

masonic

Ok, so it hasn't gone out early, but the funds have been reserved. This is because funds normally need to be in place at the end of the working day before a standing order or direct debit goes out. So for a payment going out on Monday, you'd need the funds to cover it to be in place by the end of the previous Friday. By reserving the money early, your bank is preventing you from spending the money that you need for that payment over the weekend. You'll still earn interest on the money until the date on your statement.

purplevamp

If any of my DD's are due on a Monday or a holiday, I find that more often than not they come out on the Friday before, although they are dated the Monday (iyswim?). The balance alters as well on the Friday. For this reason I make sure I have enough money in my account, but not everyone can rely on this. Can you change your DD date to a few days later, eg 3rd or 4th? Therefore if that falls on a Monday, the Friday will still be after your payday.

Hope that makes sense

Lokolo

Pretty much thats why on bills they say 'On or around date x'

So if it falls on a weekend they can take it out before (i..e friday, or in your case Sat).

Its the reason why most payroll send out pay on the friday before (if it falls on weekend), just in case things like this happen.

Misty_Blue

masonic wrote: »

This is because funds normally need to be in place at the end of the working day before a standing order or direct debit goes out. So for a payment going out on Monday, you'd need the funds to cover it to be in place by the end of the previous Friday.

Ok, that makes sense, thank you. But presumably if the funds weren't there first thing on the 29th, (supposing I was planning to pay in some cash on the Saturday afternoon, for example) my account would be showing as being overdrawn?

purplevamp wrote:

Can you change your DD date to a few days later, eg 3rd or 4th?

Yes, I think this is what I'm going to do, just to give myself a few days safety net in case of a problem.

masonic

Misty_Blue wrote: »

Ok, that makes sense, thank you. But presumably if the funds weren't there first thing on the 29th, (supposing I was planning to pay in some cash on the Saturday afternoon, for example) my account would be showing as being overdrawn?

It would depend a lot on the bank and your account T&Cs, but you could potentially run into problems if the money wasn't there by the end of Friday. In some cases, it would take your account overdrawn, but a credit on Saturday would be applied to your account immediately and correct that. However, it's better to assume a payment would bounce in that situation until you know better.

Mikeyorks

Bank with Halifax! They run full Batch systems on a Sunday night .... so you never get this 'reserved' situation for DDs due out the next working day after a weekend / Bank Holiday.

But ... the T&Cs still require you to have the funds in place the prior working day ... so it's all a bit academic! But at least you don't get this daft misleading picture of 'advance' debits over the weekend.

Extant

It might show as being gone already, but it technically isn't - it's still your money until the 1st.

What that in reality means is that your money is still cleared, and cleared for interest, so you're not losing out in anyway. But it doesn't really matter - since both Saturday and Sunday aren't working days.

It can be a little confusing, that's agreed - but it's really nothing to worry about. I think it would be simpler if they were just hidden until 0001 on Monday.