Bank transfers - where does it go !?

Discussion in 'General Chat' started by funkyspider, Jan 22, 2008.

  1. funkyspider

    funkyspider
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    Ok, I electronically transfer funds from one bank to another. It leaves my account immediately, but takes 3 working days on average to appear in the other account.

    Where on earth does my electronic money go for 3 days and why does it take 3 days - and why working days, its not like they shut the servers down at the weekend so they can some relaxation time with their little laptops, and I can't imagine it needs a person sat there checking every transaction.

    Is it a throwback to cheques and they thought we were used to 3 working days from cheques and would think it was all perfectly normal to wait.

    Any bankers feel free to enlighten me - because asking is more fun that searching on google :D
     
  2. Ian J

    Ian J
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    It's a legacy from the days when all clearing was done by mail. Now that almost all banking is done electronically it isn't necessary at all but the banks make a huge amount of money by investing your money for three days and won't give that up without a fight.
     
  3. gulliver dark

    gulliver dark
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    Same with paying credit card. Unbelievable that it's not instant but I'm not surprised by the reason.
     
  4. Ian J

    Ian J
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    I have a business bank account with HSBC and a personal account with First Direct (part of HSBC) and credit cards with both banks.

    If I transfer a sum from my business account to my personal account it is received before I've had a chance to log on to look. If however I make a payment to the credit card it still takes three days to travel from their left arm to their right arm.
     
  5. funkyspider

    funkyspider
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    So they do high risk short term lending and investments with the funds which are 'in holding'.

    Well it's just not fair - I want my Xbox Elite NOW ! (which is what it is really about :D)

    On a similar topic I recently bought a phone (off this very forum in fact) and the seller insisted on cheque which he paid into a building society and that takes 7 working days to clear, which is a real pain.

    IMO ppl who sell online should accept online payments of some form. I never buy off ebay when cheques are the only payment method as I don't even have a chequebook now as so few places accept them.

    You can see this is a subject which is annoying me a little at the moment lol.
     
  6. BiggieBig

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    apparently it's also due to security.

    people shifting money within hours instead of days going through the 3 day clearing system is more open to fraud.

    yeah right more like the bank wants to earn a few mil in intreast.
     
  7. Steve.J.Davies

    Steve.J.Davies
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    It is called 'float money'. the 3 days (5 in some cases !) is an artifice to create profits from your cash. It goes into the banking system for three days so the banks can use it for free and then pops back in.
    settlements are done very quickly know - the longer the actual time the greater the risk to the banks.
     
  8. boltoa

    boltoa
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    It's completely ridiculous, although I was pleasantly surprised recently to find out that Barclays/Barclaycard payments are instant when you pay on Barclays online banking.

    Didn't I read recently that there is going to be some legislation coming soon to change this?

    Andrew
     
  9. wormvortex

    wormvortex
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    Transfering money from account to account under the same bank is instant. Same with if someone pays money directly into your account over a counter
     

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