Overdraft Query

12bdebt3

The account balance on my current account is a plus figure as I paid a cheque in yesterday but my available balance is a minus figure because the cheque hasn't cleared yet. Am I being charged interest on my overdraft?

ironlady2022

You will be, the cheque clearance system is 2, 4, 6.

EG If you put your cheque in on Monday, it will show on your account but will not clear til the 4th working day (Friday). Some banks will allow for withdrawal earlier than this. However on the 2nd working day it will reduce any balance (eg overdraft) or earn interest (Wednesday). Up until the 6th working day, funds can still be withdrawn in case cheque bounces.

In your case, you will get charged interest on your overdraft til tomorrow.

12bdebt3

mayling03 wrote: »

You will be, the cheque clearance system is 2, 4, 6.

EG If you put your cheque in on Monday, it will show on your account but will not clear til the 4th working day (Friday). Some banks will allow for withdrawal earlier than this. However on the 2nd working day it will reduce any balance (eg overdraft) or earn interest (Wednesday). Up until the 6th working day, funds can still be withdrawn in case cheque bounces.

In your case, you will get charged interest on your overdraft til tomorrow.

Damn banks.

rb10

mayling03 wrote: »

In your case, you will get charged interest on your overdraft til tomorrow.

... unless your bank's T&Cs state otherwise.

What has been described above is the maximum time limit allowed.

With Halifax, for example, you wouldn't now be paying any fees, as they work under 0-3-6 rather than 2-4-6.

12bdebt3

I am with Nationwide, do you know how theirs works?

ERICS_MUM

arrontdep wrote: »

Damn banks.

How so ?

Payments made on-line if both banks allow faster pay will get there and be available on the same day.

12bdebt3

ERICS_MUM wrote: »

How so ?

Payments made on-line if both banks allow faster pay will get there and be available on the same day.

It was a cheque of someone that is quite old and doesn't use internet banking.

ironlady2022

arrontdep wrote: »

I am with Nationwide, do you know how theirs works?

Also 2,4,6

I looked into this last month as I get paid in the form of a cheque. Halifax allows to withdraw against it on the 3rd working day. Lloys will allow for 2 if the cheque is Lloyds branded and opened at same branch (unlikely).

Lawpf2001

arrontdep wrote: »

I am with Nationwide, do you know how theirs works?

I would assume you will be charged interest until the cheque is cleared for withdrawal. As that is when the money is effectively in your account. However, the cheque doesnt clear for certainty for another day or so after that.