3 day clearance tactics

MarkyMarkD

No, it is not so.

I can't think of ANY financial institution that works out interest based on working days. That's because the same applies to the way that they earn interest (or pay interest) to each other, i.e. based on calendar days.

Walletwatch

Agreed, the only case where the interest calculation does vary is when the denominator used is 360 days, instead of 365 for some currencies and in some markets.

koru

Doesn't the same apply to cheque clearance? If you wanted to do the transfer by way of a cheque, you would be better to pay the cheque in on a Monday or Tuesday?

ceebee_2

When I recieved a large insurance payout, it was payed direct into my current bank account ( low interest). When I was told of the three day transfer delay, I insisted on drawing out CASH, walked across the street and payed it into my High Interest building society account. I am talking about approx. £10k. The bank wasn"t happy because they had to open the vault; the building society wasn"t happy because they had to count the money and now had excess money in the building. But hell, if their stupid systems make you wait 3 days for clearance, the large amounts of cash are their problem.
In any event, I"m sure this delay is a nonsense since I recall that cheques to the Tax Authorities get cleared very quickly.

MarkyMarkD

Cheques to the Government aren't cleared any quicker than cheques to anyone else (and that includes Inland Revenue ones). The only reason any cheque might be cleared quicker than the 3 day standard cycle is if it's drawn on, and paid into an account with, the same bank.

AP

ceebee wrote:

When I recieved a large insurance payout, it was payed direct into my current bank account ( low interest). When I was told of the three day transfer delay, I insisted on drawing out CASH, walked across the street and payed it into my High Interest building society account. I am talking about approx. £10k. The bank wasn"t happy because they had to open the vault; the building society wasn"t happy because they had to count the money and now had excess money in the building. But hell, if their stupid systems make you wait 3 days for clearance, the large amounts of cash are their problem.
In any event, I"m sure this delay is a nonsense since I recall that cheques to the Tax Authorities get cleared very quickly.

I wouldn't carry £10k of cash on the street if I were you as you don't want to get mugged whilst walking from the bank to the building society! I assume the insurance payout is by BACS which is already cleared when it is credited to your current account, you can write a cheque to pay it into your building society account on the same day. For the sake of safety against any possible street crime, I will put up with the low interest for 3 days before it is cleared in the building society account.

Walletwatch

I also do the same thing though - withdraw cash from one bank and deposit into another - to avoid the loss of interest involved in clearing cycles. But then I do it, as I work in a favorable location, where all institutions I bank with have branches.

steady__eddie

I also have to carry cash from one bank/bldg. soc. to another.
I find the only drawback is that the tuppenny halfpenny institutions require notice before they will release cash, usually 3 days as they have to "order it". It must be a long walk to the vault.
In addition, they also require sight of my driving license/passport even though I am on marginally lower than intimate terms with them !

koru

Carrying cash around doesn't seem a good answer to me. The interest saving is not worth the risk. For instance, at 5% interest, one day of interest on £10,000 is about £1.40.

For bigger sums, it would be better to pay for CHAPS same day transfer or special cheque presentation, rather than walk around with that much cash.

AP

koru wrote:

Carrying cash around doesn't seem a good answer to me. The interest saving is not worth the risk. For instance, at 5% interest, one day of interest on £10,000 is about £1.40.

For bigger sums, it would be better to pay for CHAPS same day transfer or special cheque presentation, rather than walk around with that much cash.

Totally agree! (See my earlier post)