So this is how they get their bonuses?

KMK

I have a Principality monthly savings account which matures this week to give me interest of about £100. They sent the options for the release of the money and I would have preferred a transferral of the money to my bank account by BACS. However when I looked more closely, they were going to charge £37.50 to transfer the money into my account. This would have taken a third of my interest for simply entering a few digits and pressing a button. I just could not believe it and rang them to query the exorbitant charge.

They said that that was what Barclays charged them for a transfer. So I had to take a cheque. How can Barclays, or any bank, justify such a sum for a straightforward transaction. It's the highest I have ever seen. Or have I been conned here?

Innys

KMK wrote: »

I have a Principality monthly savings account which matures this week to give me interest of about £100. They sent the options for the release of the money and I would have preferred a transferral of the money to my bank account by BACS. However when I looked more closely, they were going to charge £37.50 to transfer the money into my account. This would have taken a third of my interest for simply entering a few digits and pressing a button. I just could not believe it and rang them to query the exorbitant charge.

They said that that was what Barclays charged them for a transfer. So I had to take a cheque. How can Barclays, or any bank, justify such a sum for a straightforward transaction. It's the highest I have ever seen. Or have I been conned here?

I think it was likely to be a CHAPS transfer charge. CHAPS transfers are instant, BACS payments take a few days. Charging for CHAPS is quite normal, though £38odd does seem a lot.

I just tend to take a cheque - taking the CHAPS route is only if you need the money instantly e.g. a house purchase.

WHITEVANMAN

KMK wrote: »

I have a Principality monthly savings account which matures this week to give me interest of about £100. They sent the options for the release of the money and I would have preferred a transferral of the money to my bank account by BACS. However when I looked more closely, they were going to charge £37.50 to transfer the money into my account. This would have taken a third of my interest for simply entering a few digits and pressing a button. I just could not believe it and rang them to query the exorbitant charge.

They said that that was what Barclays charged them for a transfer. So I had to take a cheque. How can Barclays, or any bank, justify such a sum for a straightforward transaction. It's the highest I have ever seen. Or have I been conned here?

'Yes sir, I know its exhorbitant, but blame those nasty Barclays bankers, its not us.'

You can well bet that they have added on their own cut to that price.
Chaps payments are usually around £25.00 even at Barclays.
If they dont offer a Bacs service just take the cheque,simples.

Chaps charges are perfectly legitimate as they normally only be used for large sum's of money where instant transferal of funds is essential, such as when purchasing a house.

dunstonh

This would have taken a third of my interest for simply entering a few digits and pressing a button

Is that what you think a CHAPS payment involves? As someone who has entered CHAPs and dealt with the receiving of CHAPS I can tell you that you are wrong. It is more time consuming and involves senior staff (who cost more).

They said that that was what Barclays charged them for a transfer.

That is not correct. Barclays charge £25. However, as Principality cant do CHAPs themselves, they use Barclays to do it. Principality are clearly adding a charge on top of the Barclays one.

How can Barclays, or any bank, justify such a sum for a straightforward transaction.

Easily justified given the level of staff involved at both ends, the time factors and greater risk.

Milarky

dunstonh wrote: »

That is not correct. Barclays charge £25. However, as Principality cant do CHAPs themselves, they use Barclays to do it. Principality are clearly adding a charge on top of the Barclays one.

But Principality does (by contrast) offer customers an E-saver. This online account naturally allows 'BACS' transfers to the customer's nominated account (al E-savers allow that, at least) and, equally naturally, it's 'free'.

But there's something adrift here: Principality won't transfer a Passbook account maturity balance to an E-saver themselves - even though both accounts are 'in-house' - and doing so would allow a free customer 'BACS' transfer if you (like me) held the E-saver account.

So it can't be about the true cost to Principality (certainly not in these cash-strapped times) can it? They will move my £1 by BACS gratis if I simply input the request online - so they DO have the means to move a closure balance by 'BACS' - and it certainly can't cost them anything approaching £37.50

I'm not saying they should do this for the OP - I'm just saying the opportunity for 'super profit' clearly exists in the current arrangement.

dunstonh

Milarky, in that case, it seems a limitation and an issue with Principality. My guess is that with CHAPS they have to walk them to the nearest Barclays. We used to get the old small building societies do that. With central products, they probably have someone that sends over a bulk to Barclays. Barclays in turn probably have to provide two staff of sufficient grade to do CHAPS (as unlike BACs it needs verifying by a second person) to spend a chunk of day dealing with them.

Building societies often have ancient software (although the banks are often not much better with bolted on software updates to 1960s tech). Sometimes they run multiple systems. The newer systems are easily updated and can be more flexible but the old systems can't. If they have one product on one system and one on another then you will get inconsistencies like that.

KMK

Thank you for taking the time to suggest possible reasons for the large sum asked for a transfer to my account. The information from Principality asked for the return of the pass book before the release of the accrued funds. The options included (of course!) putting the money into one of their savings accounts but the transfer option did not specify the use of CHAPS, which I know costs more than BACS. So I assumed, perhaps wrongly, that they were charging £37.50 for BACS. It should have been made clear which transfer it was.

Anyway, I opted for the cheque! Didn't want to lose a third of my paltry interest.

Didn't realize that CHAPS was such a time consuming, expensive process in these days of on line transactions.

dunstonh

Didn't realize that CHAPS was such a time consuming, expensive process in these days of on line transactions.

In theory, it will likely become used less in time as faster payments gets more widely used. However, it will still likely be used for house purchases and where immediate guarantee is needed.

Andy7856

I closed down my Barclays RSA last week and the told me Faster Payment services were free, thus they simply transferred my monies direct to HSBC account. (last year they wanted to charge me £20 to so the same thing, so i took it as cashed and walked next door to pay it in to HSBC - prob cost them more in their staff time at the counters)

Principalilty also wanted to charge me £37.50, I opted for the slowly and cheaper cheque option in the post...

opinions4u

My guess is that with CHAPS they have to walk them to the nearest Barclays. We used to get the old small building societies do that.

I do remember my early Halifax days when the charge for a special presentation cheque was £13. That involved 2 staff members walking the cheque round to the nearest Barclays branch, handing over a £10 note and the cheque and letting them do the rest!