Cheques Clearing

[long_live_alstey]

My understanding is the true reason why banks take days to clear cheques is so they can earn interest on the money.

But what is the reason they give to take so long to clear a cheque?

5 days to clear a bank cheque... quite stupid.

 

[TigerCraig]

Re: Cheques Clearning

Only if you have a non-interest bearing account.

If not, you start earning interest from the day you deposit the cheque (yes the bank makes a margin on the interest).

Cheques clear in 3 days now. The process goes:

Day 1- you bank the cheque and it is sent to the processing centre. The cheque is "read" by a proof machine, and the data sent to the bank on which it is drawn
Day 2- the bank on which the cheque is drawn get a report of overdrawn accounts, and make a decision on whether to dishonour cheques - advice of dishonour sent electronically to your bank
Day 3- transaction is reversed from your account, and you are sent an advice

If there was no clearance period you coul dhave withdraw the money or closed the account by the time the reversal came through.

In the past the cheque had to be physically returned to the branch on which it was drawn, hence the longer clearance times. They also used to check the signatures on the cheque, but that isn't done now (except on very large ones, and random others).

Despite public opinion, bank cheques are not as "good as cash". They can be stolen, forged, altered etc so still need to be cleared.

 

[Lady Lawrence]

Re: Cheques Clearning

This always baffles me. I deposit a personal cheque from Mum in the UK in pounds sterling and I can draw on it straight away. I deposit a tax refund cheque from the ATO and I have to wait for it to clear.

Hmmmmmmmmmm.........

 

[TigerCraig]

Re: Cheques Clearning

This always baffles me. I deposit a personal cheque from Mum in the UK in pounds sterling and I can draw on it straight away. I deposit a tax refund cheque from the ATO and I have to wait for it to clear.

Hmmmmmmmmmm.........

Foreign cheques can be done as "bills for collection" or converted and drawn against. If it gets sent as a bill it can take a couple of weeks to clear, but you get a better exchange rate. If converted you get a poor rate which has the risk of dishonour factored in.

 

[Andre]

Re: Cheques Clearning

This always baffles me. I deposit a personal cheque from Mum in the UK in pounds sterling and I can draw on it straight away. I deposit a tax refund cheque from the ATO and I have to wait for it to clear.

Hmmmmmmmmmm.........

I can understand cheques from elsewhere not clearing, but surely banks should have a 'trusted' list where they can clear them as soon as they arrive. Starting with the government being on that list. After all if the government can't pay it's cheque's then there's going to be a lot more trouble for the banks then a few dollars from your account

 

[TigerCraig]

Re: Cheques Clearning

I can understand cheques from elsewhere not clearing, but surely banks should have a 'trusted' list where they can clear them as soon as they arrive. Starting with the government being on that list. After all if the government can't pay it's cheque's then there's going to be a lot more trouble for the banks then a few dollars from your account

Cheques get forged, amounts/payees get changed. Cheques can also be stopped. Clearance isn't all about whether their is money in the account.

 

[The Legend]

Here's one to ponder.

I banked my tax cheque earlier this year, and was given the 5-7 days story from the teller. I bank with Westpac. The balance in my account (I clear it out as soon as my salary goes in to avoid the temptation of Eftpos/ATM withdrawals-and the respective fees that come with those transactions) was $1.75.

When I checked my balance online, I could see the balance of funds I was able to access, and the deposit for the tax cheque (obviously waiting to be cleared in 5-7 days), making up the total balance of the account.

Here's where it got unusual. The day after I banked my cheque was the day that Westpac automatically deducts the typical account/user fees. The amount for those services was greater than the $1.75 balance. The bank then cleared the cheque so that they could get their fees back. No 5-7 day waiting period when the bank wants to draw on the funds. I thought they needed 5-7 days to ensure that the cheque wouldn't bounce.

Westpac weren't able to provide any sort of response when I queried this. In fact, I was put on hold on three different occassions-only to find myself "lost" in the system. I went into my branch and took it up with a very red-faced manager, who was also unable to respond.

Nothing sus? I think the money gets played on the stock market.

 

[TigerCraig]

I don't see the issue here.

You are contractually required to pay the fees as at that date. The fees were debited, as agreed. The cheque wasn't cleared. If the cheque had bounced, your account would have been overdrawn, and you may have been charged further fees for this overdrawing.

Similarly, if you hadn't banked the tax cheque, the fees would still have gone through and overdrawn your account.

Why should the bank delay charging you fees that you have agreed to pay??

Why do people think banks are charities??

How was it "played on the stock market" - which shares did the bank buy??

 

[The Legend]

I don't see the issue here.

Then I probably didn't make myself very clear (apologies), or you are so staunchly advocating for financial institutions that you are biased against anyone else who isn't an advocate for them.

The issue is that banks won't put your cheque into your account straight away, but (in my case) were willing to do so at their earlier convenience. I'll add that it was also to my convenience.

You are contractually required to pay the fees as at that date. The fees were debited, as agreed. The cheque wasn't cleared. If the cheque had bounced, your account would have been overdrawn, and you may have been charged further fees for this overdrawing.

My issue isn't the payment of fees, or the scheduling of those payments. The cheque was cleared (despite your assertion), as evidenced by my bank statement. And it was clearly done to enable Westpac to get their fees. Cynical. Again, that's my point.

Why should the bank delay charging you fees that you have agreed to pay??

They don't-and I don't expect them to. Westpac seem generally flexible and generous with regard to their fee payment structure, and the fees are withdrawn on the day my salary goes in-so it aint a problem for me. I actually negotiated this arrangement with my branch manager. It does pay to shop around with banks.

Why do people think banks are charities??

Is that a rhetorical question? Some financial institutions do behave in a more charitable fashion than others. One of our local Bendigo branches regularly channels money back into community projects via a grant scheme. And good.

Banks are a business (yeah, I get that), but they need our money to keep them in business. I assume you get that.

It might help to lift the general populace's views about them if all financial institutions operated more charitably-rather than being a charity.

How was it "played on the stock market" - which shares did the bank buy??

Speculation on my part. Maybe they just channel it into money laundering schemes for crooked politicians or Mokbel. Or maybe they use it to set up sex-slave rings for bank executives.

Banks will always get a bad wrap, chief. Get over it.

 

[Leper]

Why should the bank delay charging you fees that you have agreed to pay??

I bank with Westpac. The very same account I have I set up with Port Phillip Permanent Building Society in ~1983. They became Statewide which became Resi which became Bank of Melbourne which became Westpac

I didn't get charged a single cent in account or transaction fees until the latter circa 2002. I didn't agree to any of the "terms and conditions have changed" (aka, "sorry mate, we've increased fees a further 200% because we can") scenarios, other than by default in that I'm yet to tell Westpac to stick their account (and they all know it's too much hassle for most to do that).

Banks are like dogs licking balls - they do what they do because they can.

 

[Lensen]

I bank with Westpac. The very same account I have I set up with Port Phillip Permanent Building Society in ~1983. They became Statewide which became Resi which became Bank of Melbourne which became Westpac

I didn't get charged a single cent in account or transaction fees until the latter circa 2002. I didn't agree to any of the "terms and conditions have changed" (aka, "sorry mate, we've increased fees a further 200% because we can") scenarios, other than by default in that I'm yet to tell Westpac to stick their account (and they all know it's too much hassle for most to do that).

Banks are like dogs licking balls - they do what they do because they can.

That'd be because people like you are too lazy to do anything about it!

 

[Leper]

That'd be because people like you are too lazy to do anything about it!

Correct. And the conts know it.

Oh, and the fact that there is no alternative so they know they have you by the nuts.

Eat em alive.

 

[IDGAF]

That'd be because people like you are too lazy to do anything about it!

...and the answer is ?

 

[crudbucket]

Here's one to ponder.

I banked my tax cheque earlier this year, and was given the 5-7 days story from the teller. I bank with Westpac. The balance in my account (I clear it out as soon as my salary goes in to avoid the temptation of Eftpos/ATM withdrawals-and the respective fees that come with those transactions) was $1.75.

When I checked my balance online, I could see the balance of funds I was able to access, and the deposit for the tax cheque (obviously waiting to be cleared in 5-7 days), making up the total balance of the account.

Here's where it got unusual. The day after I banked my cheque was the day that Westpac automatically deducts the typical account/user fees. The amount for those services was greater than the $1.75 balance. The bank then cleared the cheque so that they could get their fees back. No 5-7 day waiting period when the bank wants to draw on the funds. I thought they needed 5-7 days to ensure that the cheque wouldn't bounce.

Westpac weren't able to provide any sort of response when I queried this. In fact, I was put on hold on three different occassions-only to find myself "lost" in the system. I went into my branch and took it up with a very red-faced manager, who was also unable to respond.

Nothing sus? I think the money gets played on the stock market.

This doesn't make sense. A Bank would simply override the hold on the portion that overdrew the account and nothing more. It's an occurance that happens by the thousands at the end of every month.

 

[The Legend]

This doesn't make sense.

Not to you...not to me either. But that is what happened.

A Bank would simply override the hold on the portion that overdrew the account and nothing more. It's an occurance that happens by the thousands at the end of every month.

And if that was the explanation then I'd be satisfied. But they didn't "override the hold on the portion that overdrew the account and nothing more". They overrode the whole amount for the cheque. I'll say again (as in my reply to TigerCraig's post) that it appears as if the bank cleared the whole amount of the cheque for their convenience. Again, it was also to my convenience. But Westpac can't/won't offer an explanation as to why this occurred-including the scenario that you and TigerCraig have illustrated.

Banks? A little transparency...please!

 

[TigerCraig]

The issue is that banks won't put your cheque into your account straight away, but (in my case) were willing to do so at their earlier convenience. I'll add that it was also to my convenience.

They do put the proceeds of the cheque straight into your account - they just put a hold on the funds until it clears.

 

[IDGAF]

They do put the proceeds of the cheque straight into your account - they just put a hold on the funds until it clears.

They don`t wait till the funds clear , it`s a crock .

I banked a cheque once from a friend of mine one particular afternoon , spoke to the guy that night who said that he had checked his account on- line and the funds had already come out .... yet .... whilst the funds were listed as being in my account , they were not cleared for my access for 3 working days .

It is a rort and the banks are the scum of the earth ... period

I defy anyone to give me a rational explanation for this other than blatant profiteering ?

 

[TigerCraig]

They don`t wait till the funds clear , it`s a crock .

I banked a cheque once from a friend of mine one particular afternoon , spoke to the guy that night who said that he had checked his account on- line and the funds had already come out .... yet .... whilst the funds were listed as being in my account , they were not cleared for my access for 3 working days .

It is a rort and the banks are the scum of the earth ... period

I defy anyone to give me a rational explanation for this other than blatant profiteering ?

Read post #2

 

[IDGAF]

Read post #2

I hear what you are saying but i don`t buy it . Ridiculously lengthy and arduous process in this "Info-tech" age .

They already knew the funds were available on the same day .

Does not explain this.

They have removed them from said account the same day ... why my 3 day wait .

Profiteering

 

[TigerCraig]

I hear what you are saying but i don`t buy it . Ridiculously lengthy and arduous process in this "Info-tech" age .

They already knew the funds were available on the same day .

Does not explain this.

They have removed them from said account the same day ... why my 3 day wait .

Profiteering

The cheque would not have been removed from his account intra-day. All cheques are processed overnight. That gets you into the 2nd day.

Then, how about if he had written another 10 cheques which overdrew the account? His bank would have to choose which ones to bounce, and then advise the banks where they were deposited, who would then have to reverse the funds out. This has to be done overnight - on the 2nd night - which takes you into day 3.

Same thing happens with direct debits. The phone company (say) sens through a file to debit your account today and their account is credited - but they don't know until the day following whether you had monay or if the payment will be bounced.

Of course in the case of "good" clients, funds are immediately cleared and no holds are put on them - but they can still be reversed out if the cheque bounces.