Depositing cash

Rich1972_2

I put my mortgage payment in cash into my wife's bank (Barclays) on the 1st of the month,(at about 10am) the same day the DD is due to be paid. My wife received a letter today (6 nov) dated 2nd nov stating that they had been UNABLE to pay the direct debit due to lack of funds. They state "Please note that we can not take into consideration any money credited to your account on the same day that the payment is due to go out". Why do they need 1 full day to credit my wifes account with CASH!!!!!
We have been charged for the letter (Surprise) and no doubt the mortage company will charge as well. Do you thing this is unfair?

gt94sss2

Virtually all banks state that funds have to be present at close of business the working day before any direct debits/standing orders are due.

I suspect in your wife's case, Barclays tried to take out the direct debit first thing in the morning and it failed due to insufficient funds.

The one exception I know is HSBC who will not charge you if you are 'in credit' at the end of a day, even if you have technically been overdrawn at some point that day as part of their 'Fairer Fees' policy which among other things, also says:

• You will not have to pay fees for being overdrawn by £10 or less.
• You will not have to pay more in fees than you are overdrawn by in your charging month, so a £15 overdraft will not cost you £50.
• You will not have to pay a fee for an informal overdraft request if your account is credited with covering funds by the end of the same day.

Lloyds have (or are about to) adopt a similar policy giving their customers upto 3:30 in the afternoon to go back to a credit balance and avoid charges.

Regards
Sunil

realaledrinker

Co-op/smile are another who in practice won't charge or bounce cheques/DDs provided cleared funds are paid in on the same day, although their T&Cs state cleared funds must be available at the close of the previous day.

taless

Banks process the S/O and D/Ds early in the morning of the day, before any of their branches open. I'm afraid that's what most banks that I know do it.

I however agree that I don't see why can't banks process it at the END of that working day though. I bank with Natwest and LTSB. With LTSB, when I make online payments to someone else, the earliest that it can leave my account will be the next working day. Natwest, on the other hand, allows me to do the online payment immediately (i.e. no need to wait till next working day for the funds to leave the account). My experience is that:

With Natwest
Day 1 - Perform the online payment (regardless whether is it 5am or 10 am or 4.30pm or 6pm - so long it still appears as Day 1's statement date), funds leave the a/c immediately
Day 2
Day 3 - Funds reach the Payee's a/c

With LTSB
Day 0 - Perform the online payment, with "As Soon As Possible" option chosen
Day 1 - Funds leave the a/c early in the morning
Day 2
Day 3 - Funds reach the Payee's a/c

My point is that S/Os and D/Ds still use the BACS system. Why then must they choose to take the S/Os and D/Ds early in the morning, instead of say at the end of the working day? Doesn't the Natwest example illustrates that it is still possible to take the payment by the end of the working day and still reach the payee's a/c at the same day?

Just my humble opinion!

Rich1972 wrote: »

I put my mortgage payment in cash into my wife's bank (Barclays) on the 1st of the month,(at about 10am) the same day the DD is due to be paid. My wife received a letter today (6 nov) dated 2nd nov stating that they had been UNABLE to pay the direct debit due to lack of funds. They state "Please note that we can not take into consideration any money credited to your account on the same day that the payment is due to go out". Why do they need 1 full day to credit my wifes account with CASH!!!!!
We have been charged for the letter (Surprise) and no doubt the mortage company will charge as well. Do you thing this is unfair?

My understanding is that if the money that goes into your account on that day is by BACS, you should have no problem , i.e. your BACS credit will get in before your S/O and D/Ds leave, am I correct? (I know this is undesirable, but does this meet the cut off?)

Biggles

taless wrote: »

With LTSB
Day 0 - Perform the online payment, with "As Soon As Possible" option chosen
Day 1 - Funds leave the a/c early in the morning
Day 2
Day 3 - Funds reach the Payee's a/c

My experience of the LTSB system is as follows:-

Day 1 - Perform the online payment (ASAP). The funds leave the account overnight.
Day 2 - Funds shown as leaving your account on this date.
Day 3 - Funds reach the payee's account.

This is still the standard three-day BACS cycle but (as long as you don't perform the payment too late in the day (I think there may be a cutoff around 3pm but not sure) Day 1 (above) is Day 1 of the BACS cycle and Day 3 of the BACS cycle is two working days after you perform your payment.

Where you choose a payment date in advance, the money will leave your account (and is shown on your statement) as the day you choose but Day 1 of the BACS cycle is end of the previous day, thus funds always get there the day after they leave your account.

This is why, if you set up a payment on a weekend, the payment can't leave your account till the Tue, as there is no BACS processing on the Sun night, thus Mon has to be Day 1.

FBThree

Rich1972 wrote: »

I put my mortgage payment in cash into my wife's bank (Barclays) on the 1st of the month,(at about 10am) the same day the DD is due to be paid. My wife received a letter today (6 nov) dated 2nd nov stating that they had been UNABLE to pay the direct debit due to lack of funds. They state "Please note that we can not take into consideration any money credited to your account on the same day that the payment is due to go out". Why do they need 1 full day to credit my wifes account with CASH!!!!!

Very strange. I have a Barclays current account (nothing special) and a Barclays online esaver account. I run my current account at zero and keep money in savings account. I ALWAYS sign on the morning my direct debit or standing order goes out, see that I appear overdrawn, and transfer money immediately to cover the amount (mortgage, utility bills etc). Not been charged yet or had a payment refused.

Perhaps the amount of your mortgage payment is over the overdrawn limit set on your wifes account?

BTW: New LTSB rules mean that they will allow you to pay in money up to 3:30 the day you go overdrawn. If you can't get the money into the account earlier than the 1st you should perhaps consider moving to Lloyds. I don't like their online banking as much as Barclays though.

bengal-stripe

FBThree wrote: »

I ALWAYS sign on the morning my direct debit or standing order goes out, see that I appear overdrawn, and transfer money immediately to cover the amount (mortgage, utility bills etc). Not been charged yet or had a payment refused.

I presume, you have an overdraft and stay within that limit. When the DD comes in, it gets absorbed by the overdraft. Then you can balance the books during the day and you won’t be charged with interest (which is calculated at close of business).

In the case mentioned, the DD would have exceeded an overdraft or there was no overdraft in place, so it would have been ‘unauthorised borrowing’.