Lloyds to Lloyds cheques

Dagobert

I just banked a Lloyds TSB business cheque in my Lloyds TSB account. Accounts are held at different branches.

The available balance was instantly increased by that amount.

What does this means in terms of cheque clearance?

I am familiar with the 2-4-6 cheque clearing system regarding external cheques. But how quickly does a Lloyds cheque banked with Lloyds clear and when does it come off the payers account?

YorkshireBoy

http://www.lloydstsb.com/legal/cheque_clearing_process.asp

...is how it's supposed to work. Your experience is slightly different though...particularly as the accounts are held at different branches (and sort codes?).

Dagobert

I did not make a note of the sort code but I believe Lloyds TSB Scotland has different sort codes.

This is the relevant paragraph in the T&Cs:

A business account and you pay the cheque into the branch holding that account, we will show it in your account and pay interest on it (...) on the same day that we receive it and it will be available for you to use the next working day. If you do not pay in the cheque at the branch holding the business account, we will deal with it in the same way as a cheque from a non-Lloyds TSB account.

According to the T&Cs, the cheque should have behaved like an external one and funds should not have become available instantly.

premierfella

I posted a reply but deleted it as I wasn't sure what I wrote was correct.

You are saying that the business cheque was not drawn on the branch you paid the cheque in over the counter at but is still showing as available funds? That is a bit odd!

Edit: just a thought, is the business account a sole trader account?

Dagobert

premierfella wrote: »

is the business account a sole trader account?

yes and yes

premierfella

Hmm. It shouldn't make a difference of course (a business account is a business account after all).

I was just trying to think of a possible reason why the business cheque might be treated as a personal cheque in terms of availability of funds. Surely it can't be possible, for example, for a personal account to be opened and later converted to a business account without the Lloyds systems acknowledging the difference for clearing purposes.

Again, just thinking aloud at a random possible reason. Probably way off the mark!

Dagobert

The Loughborough BS banks with TSB and pays matured funds (I think by cheque) into my TSB account. These funds are instantly available.

If this cheque has the same clearing time as an external one, the funds will be cleared AFTER working day six (in this case next Thursday).

I can't see how you can find out whether this cheque clears any more quickly as the banking interface does not distinguish between available and cleared funds.

premierfella

Maybe we are at crossed wires here?

I read the terms and conditions (section 7.4) to mean that cheques drawn on Lloyds TSB accounts do not go through the 2-4-6 clearing cycle if paid into a Lloyds TSB account, but instead go through a 0-0-6 cycle for personal Lloyds TSB cheques paid into a personal Lloyds TSB account and a 0-1-6 cycle for business Lloyds TSB cheques paid into a personal Lloyds TSB account.

I agree that you only see from the banking interface the "available" funds, not the "cleared", but the formal "cleared" funds point is the same as non-Lloyds TSB cheques paid in (i.e. day 6).

In reality of course if Lloyds TSB is going to return a Lloyds TSB cheque paid into a Lloyds TSB account it is probably going to be returned, and show as such, well before day 6. But I believe they still have the right to return the Lloyds TSB cheque up to the usual day 6 if they so wish (my reading of the T&Cs).

Additional (edit): as for the Lloyds TSB account the cheque is drawn on, I don't know how it works in practice. If they do not put Lloyds TSB cheques through the "non-Lloyds TSB" cheque clearing cycle, there is every possibility that the cheque could debit the account the same day it is paid in (this is one reading of term 8.5(a) in the personal T&Cs). I've never had the opportunity to test how it works myself.

Dagobert

premierfella, I agree with your interpretation of the T&Cs. The only thing that does not tally with the T&Cs is the fact that funds became available on day 0 although this is a business account held at another branch.

premierfella

Agreed. With Lloyds TSB I don't think it matters which branch it is paid into, but I would have expected from the T&Cs for the cheque to show on the account balance immediately (and possibly debited from the business account same day) but not immediately showing as available (I'm not sure when Lloyds TSB updates the available balance for "next day" - I guess it is not necessarily midnight).

Dagobert

I phoned TSB. It seems they can see the state of a cheque. It's working day 2 to-day and I have been told it has fully cleared.

TSB to TSB cheque process must be quicker than external.