Banks clearing cheques

[callan]

How come in this supersonic age of technoogy, that it takes 3-10 days depending on account to clear a bloody cheque!
To add insult to injury, and when I paid one in after 4 pm yesterday I was told that the banking clock had gone forward a day to today.
Still bonuses all round, eh?

 

[Mad Cyril]

I like to keep bankers on their toes by wearing a crash helmet and carrying a non-descript sports holdall when paying in cash/cheques.

 

[DTS]

Having worked a few of the banks over the years I can confirm its a total mystery....

The only reason I can give is quite clearly they make money from it as the funds actually arrive on day 2 normally. The 10 days clearance is usually if its a transaction outside the normal pattern of the person issuing the cheque as kind of an extra security in theory.

 

[Cricko]

As DTS has stated it is a just a way of them using your monies for a period of time..it takes longer to clear a cheque now than if did 10 years ago....The one situation that really angered me was when a chap gave me a cheque and he banked at exactly the same bank and branch as me....I paid it in and explained that he banked there so could they check his account and let me know if the the funds were available and if so as he banked there to, could the monies be directed accredit to my account....I was told No even though they confirmed he had the funds it would still take 4-5 days for the chq to clear..

Utter madness in this day and age.

 

[MK Shrimper]

Well by 2018 they'll be a thing of the past anyhow according to the news today.

As I understood it, they take your money that you're paying in, invest it, take the interest for themselves while giving you your own money back 5 days later.

 

[Southminster_Shrimper]

so if you write and give someone else a cheque then you benefit by having that money sitting in your account for an extra few days. works both ways ;)

 

[Cricko]

so if you write and give someone else a cheque then you benefit by having that money sitting in your account for an extra few days. works both ways ;)

I am not so sure that is the case...if the person banked the cheque the same day I think you will find they deduct that amount from your account immediately..You would obviously know better though mate being in the game so's to speak.

 

[Tinks]

I have been in a similar situation in the past and have on more than one occasion questioned my bank on this. In fairness to my branch they did comprimise with me and fast cleared a cheque with no cost to me.

 

[Mad Cyril]

As I understood it, they take your money that you're paying in, invest it, take the interest for themselves while giving you your own money back 5 days later.

.....whilst providing free banking to most responsible retail customers.

 

[MK Shrimper]

.....whilst providing free banking to most responsible retail customers.

Free? My account costs me £25 per month.

 

[Southminster_Shrimper]

I am not so sure that is the case...if the person banked the cheque the same day I think you will find they deduct that amount from your account immediately..You would obviously know better though mate being in the game so's to speak.

dont believe thats the case as it wont have been processed.

i didnt realise that the cheque guarantee card wont be valid after the end of June 2011.

So cheques could go back to being very much a worthless piece of paper that someone has written on as none would be guaranteed.

Its just a very old fashioned process. A bit like sending a letter when an email will do. The problem is the joke that is "faster payments" has not come along like email did to replace a letter, and make the process quicker. It can still take 3 days under "faster payments" so hardly an improvement on writing a cheque. But that money does leave your account immediately and disappears into oblivion until it reappears sometime later in the receiving account.

 

[ldnfatso]

Cash is king as it is instant clearance. Cheques are how the banks get rich by looking after peoples money for the clearing days in their suspense accounts. All the while people use these prehistoric peices of paper the banks will continue to take the ****.

 

[Southminster_Shrimper]

Free? My account costs me £25 per month.

hardly a basic current account then. mine costs me less than £5 a month :p

 

[Mad Cyril]

My account is free.

I do however have to pretend to be eight years old.

 

[MrB]

My account is free and I get a banging mortgage rate as well. Barclays service is terrible but I can live with that for the ridiculously low mortgage interest I pay every month.

 

[MK Shrimper]

hardly a basic current account then. mine costs me less than £5 a month :p

True. Travel insurance, mobile phone insurance, home emergencies, Sentinel key/ccard doodah, AA breakdown :)

 

[BLUEBLOOD]

One of my suppliers made a mistake on my company credit card while i was making a payment over the phone so instead of paying £55.74 i paid £555.74 .. she did a refund immediately but that credit didn't hit my account until 2 weeks later .. as it was a company card it didnt bother me unduly but where the hell did that money go for all that time

 

[Benji91]

Well by 2018 they'll be a thing of the past anyhow according to the news today.

As I understood it, they take your money that you're paying in, invest it, take the interest for themselves while giving you your own money back 5 days later.

Thats spot on - the interest daily from a cheque of 100 pounds at a generous 4% interest is 1.4p a day... thats 7p a week.

If someone cashes a check of 500 pounds you can hear the champagne corks cracking all over the office as they rub their hands and think of the many ways to invest the 35p they will have taken by holding the cheque or the whole 5 days.

Im sure the 35p gets taxed somewhere along the line as well. Maybe its treated cash in hand and kept off the books.