Clearance of Debit Card Payments

Cardew

Where payment by credit card is not possible, for many years I have made large payments by debit card. For example with several new cars I paid the full amount by debit card and 30 minutes later I was driving the car out of the showroom.

I recently had an experience that I personally found surprising. I used my debit card to transfer a large sum from my bank(Santander)to my National Savings(NS&I) savings account; the transaction showed ‘instantly’ as a credit on my savings account(and as a debit on my current account)

I then attempted to open – on-line - an ISA with NS&I using those transferred funds from my savings account. This transaction failed twice, with no reason given. I eventually managed to contact NS&I on the phone and was informed that funds paid by debit card take nine(9) banking days to clear. Sure enough on page 7 of the ISA terms and conditions this restriction is shown. On the Direct saver terms and conditions it states debit card payments take seven(7) banking days to clear.

I am unaware why debit card payments take that time to clear. Obviously my bank only allow debit card transactions on cleared funds. Also should my debit card card payment ‘Bounce’(if that is the term) the funds were still held within NS&I. I would add that I have had funds with NS&I for many years. I am also aware that the funds would take less time to clear by bank transfer, I used a debit card because it was simpler than setting up a new payee with my bank.

Is it normal practice for debit card payments to take so long to clear? Also what is the reason?

Presumably the car dealers I refer to in my opening paragraph just knew I was trustworthy!

eskbanker

It's not normal practice for debit card payments to take any significant amount of time to clear but is an odd NS&I-specific constraint - no idea why they impose it though....

colsten

NS&I take unusually long times for what they call 'clearing' debit card deposits - but they do actually pay interest from the day of deposit.

Santander will have instantly reduced your available balance and shown the transaction as a pending payment. The payment remains pending until the retailer/recipient actually requests it. In some cases, this now happens instantly, in most others it takes a working day or two, and in the case of NS&I it takes much longer. I have never seen an NS&I deposit in pending for more than 4 working days though.