who gets the money when it's in bank cyberspace?

bec_881

I was just wondering whether anyone could tell me who gets the money (and the interest on the money) when it's in, what I call, bank cyberspace?

For instance, I transfer £3000 (via online banking) from my Barclays current account on 6 April. It reaches my Direct ISA account on 8 April. Whilst its 'travelling over', who holds the money? Whilst 2 days interest on £3000 is next to nothing, if everyone is doing it, it could add up.

Any insight would be very welcome.

Thanks

NFH

Barclays sends payments by FPS which should arrive normally on the same banking day. Are you saying these payments are being sent by BACS? Which bank is the payment going to? Does the receiving bank support FPS?

opinions4u

bec_881 wrote: »

I was just wondering whether anyone could tell me who gets the money (and the interest on the money) when it's in, what I call, bank cyberspace?

It is effectively in an overnight banking account earning marginally more than naff all for the bank and naff all for the customer.

Any insight would be very welcome

Why? Will it make any difference to anything?

All these payments have to go arrive by cob the following day from next year. So problem will be more or less solved by then.

Loughton_Monkey

This is a dying trade now that BACS is on its way out, and FP is on its way in.

My understanding is that the money 'in limbo' is used to fund 'overnight' money but anything earned was simply to help with the enormous cost of this cheque-processing administrative burden.

What would you prefer? The old system where you paid 30 pence a cheque? or one where you simply lose interest for a day or two?

bec_881

Thanks for all your replies.

I transferred money via online banking (not sure if this is BACs or FTP - I don't know what these acronyms mean - but there were no cheques involved, literally just buttons pressed on my laptop). It left my Barclays current account on 6 April 2010 and arrived in my National Savings and Investments Direct ISA on 8 April. It seems from replies that the problem will be resolved by next year so that's good. The days 'lost', in all honesty, were more frustrating in terms of the money be deposited going into the next ISA 'year' if that makes sense (seen as you're only allowed to deposit money up to a certain limit). I just wondered whether 'bank cyberspace' was a common way of the banks making money - but it appears not.

Thanks

YorkshireBoy

From a very long time ago...

http://www.oft.gov.uk/shared_oft/reports/financial_products/oft789b.pdf

It runs to 102 pages, so to speed things up see 2.11 & 2.12 (or search the entire document for the word "float")

anamenottaken

bec_881 wrote: »

Thanks for all your replies.

I transferred money via online banking (not sure if this is BACs or FTP - I don't know what these acronyms mean - but there were no cheques involved, literally just buttons pressed on my laptop). It left my Barclays current account on 6 April 2010 and arrived in my National Savings and Investments Direct ISA on 8 April. It seems from replies that the problem will be resolved by next year so that's good. The days 'lost', in all honesty, were more frustrating in terms of the money be deposited going into the next ISA 'year' if that makes sense (seen as you're only allowed to deposit money up to a certain limit). I just wondered whether 'bank cyberspace' was a common way of the banks making money - but it appears not.

Thanks

No difference in the "ISA year" between 6 and 8 April.

Year runs from 6 April.

bec_881

Thanks both.

NFH

bec_881 wrote: »

I transferred money via online banking (not sure if this is BACs or FTP - I don't know what these acronyms mean - but there were no cheques involved, literally just buttons pressed on my laptop). It left my Barclays current account on 6 April 2010 and arrived in my National Savings and Investments Direct ISA on 8 April.

It sounds to me as if NS&I uses a bank that doesn't support Faster Payments Service, which is quite a common scenario with public sector accounts. Barclays therefore had to send the payment via the old BACS system instead which arrives two banking days later. Have you checked the destination sort code using the link I posted above to the FPS sort code checker?

Also, there's no such thing as an online banking payment. Online banking is merely a way of instructing your bank to make a payment. The payment will then be sent by FPS, BACS or CHAPS (the last being very unusual for online banking).