Why do banks need four days?

Fatti

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Anyone here work in a bank and can explain why banks actually need four 'working' days to clear a cheque? Also, why is this same amount of time needed to transfer money, via internet banking, between one account and another (different banks).

Surely in this day and age for an internet banking transfer, the computer system would take the request, see that the money is available and should be able to tranfer it pretty well instantaneously.

If you were overdrawn, I expect the banks would charge interest on that money irrespective of whether its a working day or Bank Holiday :suicide:
 
This is a hang over from the prehistoric days before computers when everything was done by mail or hand. banks no longer need four days to clear cheques but continue to take that long so that they can earn interest.

Last week I paid someone by bank transfer and it took four days to get from my account with First Direct to their account yet earlier this week I transferred some money from my HSBC business account into my First Direct personal account and it was there instantaneously as they are part of the same group.

It would be easy to have instantaneous transfers throughout the banking system if the will was there to implement it.
 
I was going to put that in my OP as a cynical comment...maybe not so cynical after all. :rolleyes:

I've had the cheque clearance issue and now the internet banking transfer issue. To cut a long story short, my wife's car got written off when we had the flood back in July. The inusurance company took longer than normal to settle the claim, but in the iterim we put a deposit down on another car. The cheque finally turned up on the 22nd August and she put it into her account. With the Bank Holiday on the coming Monday, her bank said it would take until Wednesday of the following week to clear. We picked up the car on the Friday and I paid for it with my debit card using an overdraft facility that they gave me years ago but never used. The cheque did clear by the Wednesday and she transferred the money straight away. As of today, it's still not gone into my account and with the weekend looming, its going to be at least Tuesday next week by the time it gets there. In the meantime, the interest on the overdraft will be clocking up and probably still calculated for the 'non-working' days as well.
 
Hi,

IanJ is correct. Financial institutions don't actually need more than a few hours (if that long) to deal with things like cheques, debits, funds transfers, et al. But they do it, because it makes them money in the meantime. Thus, there motive is purely selfishness and greed. Also, it shouldn't also even be "working days" either, bearing in mind almost everything is run by computers nowadays.

Banks are basically run by hypocrits! But - as always - it's one rule for them, and another for the rest of us. :rolleyes:


Pooch
 
Hi,

IanJ is correct. Financial institutions don't actually need more than a few hours (if that long) to deal with things like cheques, debits, funds transfers, et al. But they do it, because it makes them money in the meantime. Thus, there motive is purely selfishness and greed. Also, it shouldn't also even be "working days" either, bearing in mind almost everything is run by computers nowadays.

Banks are basically run by hypocrits! But - as always - it's one rule for them, and another for the rest of us. :rolleyes:


Pooch
Your not a fan then Pooch :) I quite agree, this money is mine, they are making interest out of the short term overdraft (fair enough, my choice) and interest out of my £12000 they wont transfer. Be interested to know which bank is hanging on to it.
 
Yep its a joke. My account and joint account with flatmates is with the same bank. When I transfer rent money its done in one day. For my flatmates it takes 3 days :rolleyes:

Q: My mastercard is also with the same bank, but why does it take 3 days for payments I make to clear credit to show up? I presume its different as its mastercard?
 
It does seem some what archaic and dishonest, doesn't it?

Yet you can transfer between accounts with the same bank, instantaneously.

So, one computer system doesn't recognise or work with another?

Does it take four days when banks deal amongst themselves? I think not.
 
But if some banks say they make most of their money from corporate clients and not from the ordinary Joe, do they really have to milk the public?
 
But if some banks say they make most of their money from corporate clients and not from the ordinary Joe, do they really have to milk the public?

Morally , no.

But greed is morally exempt :mad:
 
It does seem some what archaic and dishonest, doesn't it?

Yet you can transfer between accounts with the same bank, instantaneously.

So, one computer system doesn't recognise or work with another?

Does it take four days when banks deal amongst themselves? I think not.
I have two savings accounts that I can access via internet banking, and as you say XoD, if I transfer money from my current account to one of those, it appears straight away. As the money is still within the same bank, they probably dont give a monkeys what account its in, they can still make the same interest out of it.

As LFC says, I also have a Visa card issued by the same bank that I have a current account with. If I make a payment on the that card, again using internet banking, it comes out of my account straight away then doesn't appear as a credit on my Visa statement for at least three days. So the bank makes a bit of interest and so does the credit card side.
 
What bugs me is paying cash into an account.

Pay cash into a domestic account and its instant. The funds are there and ready to use.

Pay a bill by cash, into an account (say Vodafone for example) and it's a different story. They use corporate clearing accounts and despite the use of cash, it still takes 3-4 days to get where it's going.
 
Like they can't use a system that accepts my cash and makes note of my payment reference?

Plus have you notice in films when they tranfer money into terrorists Swiss bank accounts, they never tell them that they have to wait 3 working days?
 
Plus have you notice in films when they tranfer money into terrorists Swiss bank accounts, they never tell them that they have to wait 3 working days?

What I love is the little transfer bar graph that fills nail-bitingly slowly while the numbers spinning underneath tell you how much of the $20,000,000 has being transfered as of this moment right now.
 
there is an initiative in the financial community to improve this, with pressure from watchdogs. They know they cannot continue to have this false delay in this day and age.
If they ever did this are they not pretty much guaranteed to introduce or increase some other charge to compensate?

Also I believe the four days (which I always thought was three days) are working days, as obviously the computers are all turned off at the weekends. Probably to save electricity or something.
 
What I love is the little transfer bar graph that fills nail-bitingly slowly while the numbers spinning underneath tell you how much of the $20,000,000 has being transfered as of this moment right now.
It was probably coded by the same person that thought it a good idea to display millions of secret codes on the screen as they are copied to a removable storage device.
 
Banks use clearing money for 'hot money' transactions. Hot money = Money into a country mainly due to currency fluctuations and having a bet at when and if the currency will change over night. This is just one maket they play with.

This is very common in the so called development countries for big banks to dump hot money into. Now this is no difference to you or anyone doing some money laundering. Just using the system to make overnight money. The only issue not many of use have the factor of PLC after our names. Its sort of what nick leeson was doing at the time he managed to miss place £208 million.

Just to add to this curreny amounts.....Why do you get the lowest amount in the chain ? Everyone wins other than you :nono:
 
Going off at a bit of a tangent... but I've seen threads about rip off this and rip off that etc. I've also seen news articles about anti piracy, region coding on dvd's, dollar / euro & GBP pricing. It all seems to boil down to..

Consumer versus...

I rather suspect if the banks, corporations, studios, manufacturers stop ripping us off we'd stop complaining and ripping them off in various ways. Bit of a Friday rant :lesson:
 
I used to work in a cheque clearing house. There are two ways that the value of a cheque can be collected - electronically and the manual process. Whilst it is suprising, there are still a few banks out there that use the old manual process (the machines are very expensive Unisys Windows based boxes and a bank will typically have hundreds if not thousands of these machines). This means that someone sits at a machine and keys the details of the cheque. These details are then transfered to a central file for presentation to the other bank. The exchange then takes place at night where Bank A will hand over the details of all the cheques they have collected from Bank B. Bank B will do the same. The next day Bank B will attempt to debit the accounts of the cheques that have been written and a response is created. This response is sent back to Bank A. That is why the manual process takes the three to four days.

Electronically presented follow a similar process but the details of the cheque are recorded electronically by the cheque processing machines, so the operator can just sit there watching the cheques fly past , ensuring that none get jammed.

Internet/Bank Transfers/cash machine withdraws/credit card transactions are a different story as all banks are usually interconnected electronically and there is no reason for them to be debited/credited instantly.
 
anyone also know why we get charged a telegraphic transfer fee with property completion, or any other instantaneous transfer?

I understand the BACS and CHAPS companies make ££$$kazillions
 
anyone also know why we get charged a telegraphic transfer fee with property completion, or any other instantaneous transfer?
I believe that most conveyancing solicitors still employ a woman with a beehive and hornrimmed spectacles to tap out the mortgage fund transfer details in morse code :)
 

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