Regular Saver-What happens if Direct Debit Payment Bounces

OceanSound

Bobblehat wrote: »

That's it

It's a great system. Maybe it'll catch on and be named after you.

BTW, is the three day buffer to allow for weekend/bank holiday’s really necessary?...for example, take my HSBC regular saver. The SO setup on my HSBC CA goes out every 07th of each month.

07th of December happens to be a Saturday. Hence, that SO won't be processed until tomorrow (Monday 09 December). I have the TSB SO setup to payout on 06th of each month. This would surely be sufficient?

Unless of course, I encounter this scenario - I won't as my last (12th) HSBC RS payment is in May 2020:

07th June 2020 = Sunday
06th June 2020 = Saturday

So, HSBC CA pays out SO on 08th Monday. The TSB SO is paid out to HSBC CA on 08th Monday also. However, if I always have sufficient funds in the HSBC CA (to cover SO), even if HSBC CA pays out the SO prior to TSB SO reaching HSBC CA, I'm covered.

I can only think of the three day buffer period coming in to play if we were feeding a CA like Tesco Bank, who as I recall as processing payments (SO's) even on weekends and bank holidays. (Even then it won't be an issue if I always have sufficient to cover the SO).

colsten

OceanSound wrote: »

They are all SO's.

Thanks for clarifying that it's about SOs, not DDs.

OceanSound

colsten wrote: »

Thanks for clarifying that it's about SOs, not DDs.

That's fine!, and don't worry! it's not a conspiracy.

OceanSound

Bobblehat said:

OceanSound wrote: »

Take it the 3 day gap (between 15th and 18th) is to account for weekends/bank holiday's? i.e. SO's aren't processed on weekends/bank holidays, so in the event of a bank holiday weekend, where your feeder SO payout falls on a Saturday, it will go out on Tuesday in to your CA and CA will still have double the funds to cover RS SO.

That's it

Just realized that for optimal interest on the TSB account (i.e. it's always kept as £1500), need to set the transfer out from CSB at least 4 days before. 5 days if I want to cover for the month of April.

Why?.. because Good Friday is on 10 April. One of my CSB transfer out’s is set to 09th of Each month, but CSB does not process it until the next working day. Since Monday April 13th is also a bank holiday, the payment out won't reach TSB CA until Tuesday 14th.

I'm not gonna bother with re-creating a new payment out on CSB just for this anomaly. Will just pay TSB account and Halifax account (which is where the TSB SO pays to) manually on Thursday 09 April, then do some moving around on Tuesday.

Same scenario applies in December 2020 (Christmas Day is on Friday, so Boxing Day bank holiday is on Monday 28th). Luckily I don't have any RS SO's paying out on those dates.

If anyone happens to adopt this system, keep an eye on the Easter and Christmas break dates and start any RS so that the payment out (SO's) avoid those holidays.

xylophone

This is where the full fat 123 comes in handy.....