Why Is There A Delay In Clearing Cheques?

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Swirly Chaser

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Why does it take 5 working days for a bank to clear a cheque?

I know what the procedure is (i.e. getting funding authorisation etc from the other bank), but why is this not done automatically?

Someone pays a cheque into an account, the bank immediately makes an attempt to withdraw the funds from the cheque source, it either succeeds (funds are there) or it doesn't (funds are not there, cheque bounces). Shouldn't this be quick and simple?

When you withdraw money from a cashpoint, it is automatically deducted from your account.

What is the reason for the delay in cheque clearing?
 
Originally posted by Colin Phillips@Dec 9 2004, 01:39 PM
So that they can make more money at your expense??
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That is the only reason and it's the same reason why debit card payments don't show up for 3+ days (I know if you pay something by debit card it isn't deducted for 3+ days but it IS deducted immediately from your available balance).
 
I hazard a guess that it's something to do with earning interest from the money that hasn't been credited to your account yet but has been deducted from the originating account.....in the 4-5 days the money is in no-man's land I guess the bank can claim the interest on it.
 
If that's true, I don't think that qualifies as a justifiable reason to withhold the funds.

Why has nothing been done about this?
 
I'm sure it doesn't qualify as a justifiable reason, but we're talking about banks here!! They do what they want, when they want & charge us for it! Besides, they'd deny it every inch of the way, I'm sure.

Incidentally, my old next door neighbour used to work at Natwest as a manager in the call centre. He left because he hated the underhand schemes they used to con customers out of cash - their staff are trained to encourage people to do whatever benefits the bank best, ie if a customer asks about savings accounts they are supposed to advise them that they'd be better off keeping their cash in their current accounts but that if they insist on wanting to know about savings accounts to encourage them to open accounts with the minimum rate of interest payable to the customer.
 
In the 18 month period up to Dec 2003 I made a significant amount of money (share from 26p to 533p) investing in a company that has developed software that allows banks to see ,on real time basis, balances held at other banks. This enables transfers to be made instantly. Unfortunately it will only be used for transactions between banks and large corporations because the benefit of very many billions of pounds of balances on which interest is generally not paid is extremely important to the profitability of the banks.

It comes down the fact that they do it because they can.B@stards
 
We moved away from paying staff by cheque for the reasons you have hi lighted Swirley. Our company bank is currently Barclays, and luckily, most of the employees bank with Barclays too, so when we make a BACs payment, it shows up in the account within a couple of days. I spend alot of time swapping money around to make sure I am earning as much interest as I can, as believe me, as SL pointed out, no Bank is ever going to advise you to move your funds into an account that pays a better rate of interest.
We arranged for our "Bank Manager" to come and visit us a few months ago, and he turned out to be a jumped up little prat straight from Uni, who only wanted to sell to us. He was basically a salesman for the bank. He would not even leave us a phone number, he told us we would have to go via a call centre if we need any help with anything. Banks really are the pits nowadays. I do admit though that I do like online banking. It, to me, is an absolute godsend!
 
The British banking system is a disgrace - cheques and banks transfers could be same-day transactions, but the bnaks act as a cartel to prevent this happening for reasons stated abvoe (namely interest retention).

The government, which sadly is Labour in name only, should set up a State-run instant clearing alternative - that would put the wind up the fuckers. :lol:
 
I took large ammount!!!! from goverment bonds.... wanted it urgent it took 2 weeks to clear, the bank would not let me take it out without a charge (bridging loan)

I nearly stopped using banks and had a huge row with them, (I said its a goverment bond not a FFFFFFIN draft from a scrap dealer but no they kept me waiting) they sent me a letter of apoligy.........


wont put what I think of them............. Zorro may appear??? :lol: :lol:
 
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