Zigs Theory on the Bank Clearing System

It has only ever taken 4 and a half days to clear a cheque. Three days from paying in to get to the bank it was drawn on, they can then bounce it if there are reasons for doing it, if they don't bounce it that day they have untill 12 O'clock the next day to phone up the relevant bank to declare it as a late return.

So why do the banks keep us from our money for upto 7 days?

So they can show our balance to be negative, leaving us open to all sorts of charges & penalties for not having cleared funds in our accounts.

Ever wonder why the bank manager is driving a better car than you ? Its not because he's so much better at his job, its because he's so much better at reading between the lines and ripping Jo Public off.

 

According to my ex-banker husband, cheques can bounce anytime up to ten days! Not that - that's any help to you Ziggy.

 

They sure take it OUT of your account quick enough.....

 

I know that it takes longer to clear a cheque if the bank is different from yours.

 

You're absolutely right Zig. On more than one occasion at my last job, my wages were late going in.

One time, before kicking up a stink at work, I decided to phone the bank and try to get past the first line support, who to be fair to them, just follow scripts. I wanted to know if they had any indication that the money was on its way.

I had standing order going out the next day, which would make me exceed my overdraft limit and get fined.

To my surprise, I got through to someone at the bank who could check a bit deeper into my account. To my further surprise, I got told "yes, the payment was sent to us. I can see it in the queue to be moved to your account". I asked when it would get to the front of the queue, and was told "should be there by about mid day tomorrow".

I asked how that could be, it was transferred by BACS, Bankers Automated Clearing System. Therefore the money is already cleared. "Oh yes, its cleared, it just takes a little time to work through the system", I was told. The person tried to justify this by pointing out that there are many thousands of transactions in the queue.

I told them I was a software developer, and that for over 10 years my career I'd developed transaction database systems for a large financial company. That meant that I could say with absolute certainty that if they are able to see the transaction at all, then it should only take seconds at most to do the database update on my account. I received no significant response to this.

So the only possible explanation is that they were keeping my money floating about for a while. I thought this was just for the overdraft fees but a very business savvy friend friend told me rather convincingly that it is a bit more sinister than that. By keeping hold of people's money for half a day or more, it looks to the auditors, shareholders and prospective investors that they have more liquid assets than they really have, and furthermore, their traders use our money in their gambling games.

 

This is all true Dave. I used to work for one of the "Big Four" banks, the longer they can keep "Your money" to themselves, the more money they can make off it.

Reason i've gone down the "Zigs Theory" threads this time is that I paid a cheque into my business account & then transfered an amount into my personal account from that. It made the business look like it was thousands overdrawn & stopped me taking any money out of the business account even though there was plenty of cleared cash in there

Think I have said this before, but I was asked to perform "dodgy" transactions when working for the bank, which I have since reported to the old bill.

 

I used to set my Current account so that the Direct Debits, especially things like the Mortgage, were actioned when the monthly salary payment hit the account.
As the Salary was the 15th each month the DD were set the same date.

I then found that the Bank actioned the DD's and SO's first and then applied the Salary transaction, which sometimes resulted in going overdrawn (guess what - Bank charges apply)

I could get no sensible response as to why they carried out transactions in the order they did (I had my suspicions!!)

Resolution - move the dates of the DD's and SO's to the 20th.

I had to do the legwork. The Bank was not helpful in this regard - I don't know why!