Who gets the interest on my money while its in cyber-bank-space ?

TonyCat

I made a transfer from my ING account on 27th Sept which was debited immediately. It is going to Lloyds and will probably hit next Tuesday ( 3 working days ). Its definately not with Lloyds today so the earliest is next Monday, but more likely Tuesday. Anyway, who earns interest on this. ING or Lloyds while its 'in transit' ?

YorkshireBoy

TonyCat wrote: »

I made a transfer from my ING account on 27th Sept which was debited immediately. It is going to Lloyds and will probably hit next Tuesday ( 3 working days ). Its definately not with Lloyds today so the earliest is next Monday, but more likely Tuesday. Anyway, who earns interest on this. ING or Lloyds while its 'in transit' ?

If you initiated the transfer earlier enough on Thursday, the money will arrive at LTSB on Monday.

The interest, termed 'float interest', is earned by the banks...but not for much longer: http://www.fastpayments.co.uk/faq.asp#WhyAreFasterPaymentsBeingIntroduced

A question though, why did you transfer your money so late in the week that you have incurred a weekend in there?

If it bothers you so much, why didn't you transfer it on Wednesday, and then park it in a LTSB savings account over the weekend and until you needed it?

TonyCat

YorkshireBoy wrote: »

If you initiated the transfer earlier enough on Thursday, the money will arrive at LTSB on Monday.

The interest, termed 'float interest', is earned by the banks...but not for much longer: http://www.fastpayments.co.uk/faq.asp#WhyAreFasterPaymentsBeingIntroduced

A question though, why did you transfer your money so late in the week that you have incurred a weekend in there?

If it bothers you so much, why didn't you transfer it on Wednesday, and then park it in a LTSB savings account over the weekend and until you needed it?

I didn't say it bothered me - I simply asked a question. I was curious which of the two banks benefited interest wise and assumed they both got a piece of it. Yes, it was my poor planning that caused this situation so I'm irritated with myself, not anyone else. I posted this after reading a thread discussing 'free' banking. It simply prompted the question in my mind.

jonesMUFCforever

Have you also noticed it works both ways?
eg if you pay for something online or by debit card it normally takes about 2 days for your account to be debited?

BlondBoy

ejones999 wrote: »

Have you also noticed it works both ways?
eg if you pay for something online or by debit card it normally takes about 2 days for your account to be debited?

That's a fair point, of course, and the couple of posts above got me round to wondering - when Fast Payments start, will that equally make debit card transactions faster too?

jonesMUFCforever

BlondBoy wrote: »

That's a fair point, of course, and the couple of posts above got me round to wondering - when Fast Payments start, will that equally make debit card transactions faster too?

Who knows?
I don't think it will affect the debit card processing.

TonyCat

ejones999 wrote: »

Have you also noticed it works both ways?
eg if you pay for something online or by debit card it normally takes about 2 days for your account to be debited?

I didn't notice - I don't have a debit card.

golf_addict_2

ejones999 wrote: »

Have you also noticed it works both ways?
eg if you pay for something online or by debit card it normally takes about 2 days for your account to be debited?

I still think it is all in the banks favour. My account was debited with two payments for 1st October today,( 30 September) but my pension also due on 1st October was not credited. So this does not work both ways!! When queried with my bank I was told if it falls at a weekend it is always taken early. First time I have noticed it - is this their way to recoup the money they are having to pay out for illegal charges? Luckily I had enough money in my account - but if not and I had not noticed the balance I was told my account would register as having insufficient funds.

jonesMUFCforever

golf_addict wrote: »

I still think it is all in the banks favour. My account was debited with two payments for 1st October today,( 30 September) but my pension also due on 1st October was not credited. So this does not work both ways!! When queried with my bank I was told if it falls at a weekend it is always taken early. First time I have noticed it - is this their way to recoup the money they are having to pay out for illegal charges? Luckily I had enough money in my account - but if not and I had not noticed the balance I was told my account would register as having insufficient funds.

Whatever you say the 30th September is not a working day and the amount will be showed as tomorrow's date on your statement.
It is earmarked so that you cannot 'spend' it over this period.
If you have enough money in your account then no problem but if you do not it is your problem if you do not have enough money to meet your payments ONE working day before they are due in this case last Friday.
This has been the way it has always worked and is nothing to do with the banks trying to recoup money.

They will get more than now anyway when the charges structures are implemented by the banks and they definitely will not be illegal!

As you have money in your account you will have nothing to worry about.

jonesMUFCforever

TonyCat wrote: »

I didn't notice - I don't have a debit card.

It is exactly the same for credit cards!

Milarky

There are a range of ways to mitigate losses - I'm sure we have all tried these from time to time. Until Faster Payments arrive they are worth considering (depending on amount)

Using CHAPS instead of BACS: (not always available) for £20 to £30 you can aviod losing interest altogether. This only saves money where really large sums are involved.

Writing a cheque against your current account agreed overdraft: Since it takes two working days following presentation for the cash to leave your account (which can be transferred instantly in some cases from a high interest paying - albeit not the highest - accounts linked to your current account) you will only lose one day's interest potentially (it depends on the cheque being presented by Tuesday to clear on Friday and avoid the weekend.) From next month the three days drops to two - meaning that you potentially lose no interest this way.

Drawing cash (only limited amounts possible) and paying in potentially on the same date. This can eliminate lost days altogether but if the payments are not offset against an overdraft the cash credit may need to be a day early to allow for this.

Always make payments where possible fall on a (working) day early enough in the week: Monday, Tuesday or Wednesday only.

Some banks payments are known to exceed the standard BACS cycle: Some bill payments to credit cards go 'through' (that is,'appear') only one day after being sent. Sometimes use of a debit card (not always available) gives credit on the next day.

Debit card (DC) payments: never 'leave' the current account instantly and take at least a day to appear. However different banks treat DC payments differently. I have found

Nationwide: same day reduction in 'cleared' funds to cover. So you have to top up account that day regardless of when item is shown on statement
cahoot: Next 'day' regardless (including weekend days)
A&L Next 'working day' (and therefore excluding Sundays)

As someone above says, what happens after Faster Payments arrive to the other systems in use is a moot point. It is not even certain that individual banks will all have to process instructions on the day they are given - so that although the transfers will become instant (and no interest is lost by the customer) the ability to make use of these transfers depends on the sending bank allowing 'set up any pay' to be instant too.