Money clearance

Toxicboy

OK This is thing I am getting increasingly peeved about. Bank clearance times in the UK.
In the Uk it can take up to 7 days for money to clear and yet in the rest of the Europe it can take only a couple of hours for money moved from one account to another to clear electronically. I can just about understand a couple of days with cheques but even then I am a little sceptical but when I need to transfer some money from my account to my nephew to pay for his accomodation or something similar it can taqke up to 5 days for the money to go through. This is despite the money transfer being done electronicallly using my internet bank account which apparently saves the banks money in administration.
There are some lies about why it takes so long on the Banking Code website but is anybody else upset about this system where the banks earn interest on your money for the couple of days it is floating around in cyberspace or is this just another example of the rip off banking system we have in this country.
I would love to hear your views

Toxic Boy

jillie1974

its crazy...
even when you deposit cash its not here till the next day but... in dublin yesterday my mum put some euro in my irish account and i was able to withdraw it here 2 hours later!!! here it would have been the next day!! i just think its another way for the banks to make money from us !! the money must be held somewhere for them to make interest.. cant evenimagine how much at one timeis in 'limbo'!

tom188

cash is usually available the moment it ts paid in

futher changes to the bacs system is to be expected next year (do a search to find recent threads). The current system has not changed significantly since the 60s - hence the time it takes.

JohnPeard

The time it takes to clear funds electronically in the UK is inexcusable.

No way can UK banks blame 'out of date technology' - the UK is one of the leading world finance trading centres, and any so called apology - "but we are looking into it', is little short of a con in my experience.

The information provided to me by NatWest, which I have confirmed in writing to them, is that when funds are transfered on-line by internet banking they are debited at 6.30 p.m. at the end of that working day. They are then held in suspense account by the receiving bank, and available to that bank, at the start of the next working day.

I have pushed Lloyds for an explanation of why there is an internal delay between receiving funds and crediting an account and was told, quite curtly in a letter "we have no obligation to explain in detail our procedures"

No doubt there will lots of posts putting me in my place for this - but electronic transfer is instant by definition - unless they use a different speed of electricity to the rest of the cosmos. It is purely down to how banks schedule payments and credits in batches.

JohnPeard

I knew I could rely on you, Al Mac, to put me in my place !!

But really, it should be up to the banks to provide at least a reasonable and plausible explanation, not contributors to this site.

gt94sss2

John - Its not our fault if Natwest have given you the wrong info and misled you, as you have been told several times

Toxicboy - By November 2007, online transfers between banks should happen the same day.

Also, if you and your nephew bank at the same bank such transfers can take place instantly already.. thats certainly the case with HSBC/First Direct among others.

Regards
Sunil

tom188

Also LTSB personal cheques clear instantly when paid into LTSB accounts.

SparciaM

Under current UK BACS transfers, transfers between different banks take a MAXIMUM of 3 working days. Any longer and you can claim interest and charges from the receiving bank.

Eg:

You send £100 from HSBC to Lloyds. Money leave HSBC at end of "banking working day" around 4pm and send to Lloyds (so HSBC get a few hours interest). Day 2 money arrives at Lloyds suspense. On Day 3 Lloyds credit the account from the suspese.

With cash, it is instant as long as the money is paid into an acc before 2 or 3pm. If you can't withdraw on the cash that day, you can claim money back from the receiving bank.

End of 2007, the BACS system will be upgraded and integrated into the CHAPS system, which means that money from HSBC to Lloyds will take hours and minutes not days. I do believe that when this happens we'll have to pay for the service. As a same day transfer costs the bank £7 to transfer the money, that's why they charge CHAPS at £35. BACS transfers cost anything from 50p - £2 depending on transfers/banks etc. (last time I got the details, from the bank I worked for). Also, with this new system their wont be any need for weekends of banking days anymore.

tom188

It can take an extra day i think if the bank isnt a clearing bank