Why do banks take the outgoings before adding the incomings?

ceejaydee23

Well as the title suggests! at the beginning of the month, i have most of my DDs go out my account, and i also have a payment from my other half go into my bank account! ALL the DD's were taken out before the incoming funds were clear, subsequently taking me 125 OVER my Overdraft luckily the bank arent charging due to the money clearing same day! BUT it means that 125 is lost! and im sooooooo struggling because of it, is this normal practice?

rb10

Banks tend to order it in this way on statements and online: it doesn't mean that it actually happened in this order.

And the £125 isn't actually lost - as when the credits came in they paid that off, so it's simply a matter of what order it is presented to you in. If they chose to present it in the reverse order, the final outcome would have been exactly the same.

It tends to be best to leave a day or two between when money comes in and when DDs are due - just in case the money coming in is delayed.

peachyprice

How is the £125 'lost'? It's been used to pay the DD's.

I can't see why your struggling, it's not making any difference to your budget, and as long as your account reconciles at the end of the day you won't be charged for being OD, because you weren't.

td_007

It is best to be aware how a particular bank deals with this case. With Lloyds TSB as long as the negative balance is cleared by 3.30 pm the same day there are no charges. However, with A&L if the a/c goes into negative then charges are applied even if it is cleared the same day.

Consumerist

Printed statements tend only to provide a balance at the close of business each day so you do not actually go into overdraft unless your balance is negative at that time.

Strangely, however, online statements tend to show a balance after each transaction so that the account appears to be briefly overdrawn because debits are recorded before credits. It's just a technicality.

If there are sufficient funds available at the time of a transaction then you have not gone overdrawn.

Consumerist

td_007 wrote: »

However, with A&L if the a/c goes into negative then charges are applied even if it is cleared the same day.

Not in my experience with the Premier Current Account. I do, however, check that there are sufficient funds available to cover a payment before making it. For DDs, however, there must be sufficient funds at close of business the working day before the payment is due.
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