Clearing cheques

jangor_2

This morning my debit card was declined twice. I rang the Bank and was advised I had insufficient funds. I protested as I knew this was not the case. I was kept holding for a long time and then advised that the Building Society cheque I had presented on the 22nd, would not clear until possibly the 30th January. I was then advised that a cheque (I mailed to a company on the same day) had already been presented for payment but they were not sure if it would be met! I then insisted that my account could not be empty. They did a further check and advised that my account is swept periodically into a savings account and funds had not been released from this to ensure my account was in balance.

I am very puzzled, when my account was transferred to Barclays following the closure of the Woolwich, I was advised that if my account ran low it would be automatically topped up from the savings account and indeed this has always happened and I have never experienced any problems. The person I spoke to could not explain why this had not happened on this occasion but kept advising me that the cheque I had sent to the company may not be met. Why is this cheque clearing far more quickly than my own? If costs are incurred, should the cheque not be met, who will be responsible for paying it?

I hope my story is not too confusing.

Thanks.

withnell

Cheque clearing goes on the 2-4-6 rules, 2 days for interest, 4 days cash available, 6 days it can't be reversed - so your money should be available for withdrawal on Weds 28th (Fri 30th is when it can't be reversed)

willo65

jangor wrote: »

This morning my debit card was declined twice. I rang the Bank and was advised I had insufficient funds. I protested as I knew this was not the case. I was kept holding for a long time and then advised that the Building Society cheque I had presented on the 22nd, would not clear until possibly the 30th January. I was then advised that a cheque (I mailed to a company on the same day) had already been presented for payment but they were not sure if it would be met! I then insisted that my account could not be empty. They did a further check and advised that my account is swept periodically into a savings account and funds had not been released from this to ensure my account was in balance.

I am very puzzled, when my account was transferred to Barclays following the closure of the Woolwich, I was advised that if my account ran low it would be automatically topped up from the savings account and indeed this has always happened and I have never experienced any problems. The person I spoke to could not explain why this had not happened on this occasion but kept advising me that the cheque I had sent to the company may not be met. Why is this cheque clearing far more quickly than my own? If costs are incurred, should the cheque not be met, who will be responsible for paying it?

I hope my story is not too confusing.

Thanks.

Not usre about barclays but had this been Natwest then the account would be showing overdrawn today but any payments going out would be paid as long as there is funds in the savings account it sweeps between and at midnight the transfer would occur and your balanc ewould be sorted again.

Re your cheque, the cheque would probably show as cleared on monday, if not then today....But a cheque can still bounce until day 7.

rb10

withnell wrote: »

Cheque clearing goes on the 2-4-6 rules, 2 days for interest, 4 days cash available, 6 days it can't be reversed - so your money should be available for withdrawal on Weds 28th (Fri 30th is when it can't be reversed)

That's the standard timescale, but Halifax use 2-3-6 for current accounts, just to confuse!

Mikeyorks

Your cheque should be cleared (for funds) by the 28th - at the latest. Only as late as the 30th - if you paid it directly (are you able to do that?) to the Savings account (2-6-6).

You need online banking ..... makes problems such as this much easier to pick up.

jangor_2

Thankyou for your responses. I didn't actually realise I had a separate savings account, I do not have a separate card or separate account number for one. I think this is why I was so puzzled because I knew my account was in credit even without the cheque I paid in on the 22nd. There was certainly sufficient funds to cover the cheque that arrived for payment.

cottager

Jangor's question got me wondering, so for interest...

Maybe I'm mistaken or maybe it's now changed, but wasn't it the case that if a cheque you wrote went to someone who shared the same bank, and particularly if it was in the same general area (and assuming they presented it immediately), it would clear more quickly? And if they shared the same branch as well as bank it would be immediate, or the next day at most?

Maybe one day we'll get same-day electronic cheque clearing, like Oman.

Extant

cottager wrote: »

Maybe I'm mistaken or maybe it's now changed, but wasn't it the case that if a cheque you wrote went to someone who shared the same bank, and particularly if it was in the same general area (and assuming they presented it immediately), it would clear more quickly? And if they shared the same branch as well as bank it would be immediate, or the next day at most?

This varies from bank to bank, but I believe Lloyds counts their own cheques as being cleared over night. Barclays counts "house cheques" as being cleared as soon as they are processed in branch - a house cheque being a cheque deposited in to the same sort code it was drawn on.

Maybe one day we'll get same-day electronic cheque clearing, like Oman.

Highly unlikely: why invest in a declining system?

Cheque usage in the UK has been declining year on year since 1991, with many retailers now choosing not to accept them at all. In 2007, cheques accounted for just a little over 10% of all non-cash transactions - compared to 40% in 1995. With usage still predicted to fall by around 6% every year through to 2015 (the effective end of the personal cheque), there is no valid reason to invest in such a system.

There's also more to consider in the sense that Oman is not the UK - there are vast differences that make a valid solution for them useless to us. First, there's the fact that their population is below 3m - ours is over 60m. Their population is significantly less dense than ours, with about 30 times more living in the same area of land. So, for communities and people spread out much more than us, cheques are going to be very useful.

cottager

BarclaysManager wrote: »

Highly unlikely: why invest in a declining system?
Cheque usage in the UK has been declining year on year since 1991, with many retailers now choosing not to accept them at all. In 2007, cheques accounted for just a little over 10% of all non-cash transactions - compared to 40% in 1995. With usage still predicted to fall by around 6% every year through to 2015 (the effective end of the personal cheque), there is no valid reason to invest in such a system.

Thanks, appreciate that.

But am I thanking my lucky stars for cheques this past week!
Online banking failure on a business account (technical issue, not of our making), with wages, tax, VAT, credit cards and all monthly supplier payments due. Went through a complete book at one sitting; haven't signed my name that often in a while.

I'm still quite attached to cheques, even though I don't use them so often these days, but without them as a fallback there just wouldn't have been another way around this problem, and we'd have been in an even bigger and more serious hole than we already are.

Extant

cottager wrote: »

I'm still quite attached to cheques, even though I don't use them so often these days, but without them as a fallback there just wouldn't have been another way around this problem, and we'd have been in an even bigger and more serious hole than we already are.

There is a thing called the National Payments Council, which is basically all of the UK financial institutions, the OFT, etc. Anyway, one of their current objectives is to manage the decline of the cheque in the UK, which is now seen as irreversible and inevitable. In fact, they aim "to ensure that acceptable alternatives are developed and made available so that users are not disadvantaged."

oldandgrumpy

I have a Barclays current account which is "swept" at the close of business each day. Most Barclays staff have never seen such an account, as they don't set them up anymore.(Or so I am informed each time I talk to them!)
At the close of business the account is reset to the level I have set.
BUT....to make payments the money to meet the payment has to be in the account the previous day. But it has been swept, dear Lisa, dear Lisa, swept.
OH. Then you will have to raise the limit until the payment is made, dear Henry, dear Henry, raise it!
Now with a cheque, which is taken out first each day, BEFORE payments in are registered, you have to be more careful.
I did have a reserve of £1000 on it at one time...but of course I could go into overdraft before the close of business. So I stopped that one.
With the measly interest rate the linked savings account is making I wonder why I bother, but if it does become significant in the future, I guess they wouldn't reinstate the link if I cancel the arrangement or don't use it for a time.