Direct debits and standing orders going out the same day salary is paid in? Charged overdraft fees?

zagfles

jimjames said:

zagfles said:

SouthLondonUser said:

If I have my salary paid into my bank account via BACS, can I have standing orders and direct debits going out of the same account on the same day?

Or is it best to ensure payments go out at least 1 day later?

Basically the question is twofold:

1) Can I be in a situation where, say, the payments go out at 8.00am, the salary gets paid in at 10am, so the payments would fail if I don't have enough money before the salary gets paid? or does this depend from bank to bank

2) If instead I have an overdraft agreed, would I be charged for the overdraft? Do banks charge for an overdraft which gets repaid on the same day? Or is it one of those how-long-is-a-piece-of-string questions, before each bank can have wildly different terms?

Thank you!

So it's worth having an overdraft even if you don't need to borrow, to cover this situation and to stop payments bouncing eg if an incoming payment is late. My employer once paid late due to a problem with their bank, but none of my DDs failed because my overdraft was big enough.

It might depend on your account status or credit history I guess but I have no overdraft and I've not had a payment failed due to insufficient balance, it just takes me overdrawn until I pay the money in that day.

That might change/have changed recently, now that it seem banks have been prevented from charging more than a minimal amount for unarranged overdrafts. Seems most charge 0% for unarranged overdrafts!

I guess it depends if they can see money coming in eg a pending BACS payment, if not there's no real benefit to the bank allowing the transaction, and obviously a bad debt risk. 

phillw

jimjames said:
It might depend on your account status or credit history I guess but I have no overdraft and I've not had a payment failed due to insufficient balance, it just takes me overdrawn until I pay the money in that day.

My understanding is that direct debits show on the date they are requested, but the money doesn't leave the bank on the same day. If by the end of the day you still haven't gotten enough money to cover it, then they will reverse the payment (I've had them literally disappear) and the following day they will send a failure notice.

Direct debits can be cancelled on the day they go out, after the transaction appears.

Standing orders are different, they will fail if you don't have enough money and no authorized overdraft and likely if you go over your limit. They will be retried a couple of times on the day, and if the last try of the day fails then you'll get charged by your own bank for not having enough money in the account.

SouthLondonUser

Thank you all. The picture is much clearer now

enthusiasticsaver

Our pensions goin to Starling on 1st of the month as do most of our bills. Not had a problem so far. 

Rob5342

Nebulous2 said:

Nationwide annoy me. I do my money shuffle on the 1st of every month - generally in the middle of the night if I waken up. At the latest by 7 o'clock. Then mid-morning I get a text from them saying there isn't enough money in my account and I need to pay in by 2.30pm to ensure all payments are made, up to 10 hours after the money has been put in. 

The older banks often seem to have quirks like that, presumably because they have bodged things into older systems instead of building it all from scratch.

If it annoys you why don't you switch to a modern bank like Starling or Monzo?