Am I Overdrawn?

capehorn

Sorry if this seems a bit of a basic question but I'd like to get this clear in my mind so I don't make any mistakes in the future.

Imagine this example:

I have £145 in my bank account. I go to a cash machine and deposit a cheque for £300. I then withdraw £150 from the machine. Am I overdrawn?

Of course the question is the issue of whether the deposited cheque has to clear before I can take the money. My feeling is that I probably am overdrawn, but then it doesn't seem fair that the cash machine tells me after I deposit the cheque that my balance is £445.

K9cuddles

I would stay yes you are overdrawn as the cheque funds won't have clear and hence aren't available in your balance.

M_Thomson

capehorn wrote:

Sorry if this seems a bit of a basic question but I'd like to get this clear in my mind so I don't make any mistakes in the future.

Imagine this example:

I have £145 in my bank account. I go to a cash machine and deposit a cheque for £300. I then withdraw £150 from the machine. Am I overdrawn?

Of course the question is the issue of whether the deposited cheque has to clear before I can take the money. My feeling is that I probably am overdrawn, but then it doesn't seem fair that the cash machine tells me after I deposit the cheque that my balance is £445.

Yes you would be overdrawn. The cheque hasn't cleared on your account yet, so is not cleared funds. I am sure the machine would show an cleared balance and an available balance so you know what you can withdraw.

capehorn

I agree with both of your answers, but I've just got my statement and at no point was I overdrawn - the cheque amounts were credited to my account immediately! After I deposited the cheques, the balance shown by the machine included the cheque amounts.

My account is a Lloyds TSB classic account. Does anyone know if Lloyds are different in this respect to other banks?

oldwiring

If a bank permits you to draw money or pays cheques on your behalf using items that are uncleared you are overdrawn mo matter what the statement shows and at the least are liable for debit interest. The bank is absulutely in its right to refuse payment out in excess of the available balance. I do not know what the current practice is but for normally well behaved customers, who went beyond what was thought safe, bouncers were often returned "effects not cleared; please represent" rather than "refer to drawer; pleae represent", the former answer being less damaging to the customer's credit.

Gordon_the_Moron

Another interesting question, on the screen of Nationwide's cash machine when I deposited £40 earlier it said "All deposits are backdated to the time they were made"

So, if I'm £10 off my overdraft limit (I'm not!) and deposit £40 which is sat uncleared in the cash machine (and not showing on my balance available or otherwise, at that point) if I then go and try and spend £30 on the card, will they decline the transaction and if not will I get an overlimit fee?

jonesMUFCforever

The cheque that you pay in is immediately shown as a credit balance on your account but is not cleared (available for you to withdraw) until it has gone through clearing cycle (unless it was drawn on a private LTSB account).
So technically you would have been £5 o/d.
Currently LTSB have a £10 'buffer' which if you do not exceed you do not get charged.
This will change from November when if you go o/d even 1p over you will be charged.