"not inconsiderable sum of money"
That's part of it, FPS is designed for high volume lower value transactions, most banks cap it.
With 3 days your funds are probably going by BACS and in the meantime they're in a holding account. Here's why:
BACS clearing cycle:
Day one, send file. Depending on method it might hit VOCALINK immediately or might be held til later and batched into a larger file. In your case it'll be the latter.
Day two, file is processed
Day three, transmitting account is debited, receiving account is credited. NB in your case your account isn't the transmitting account, it'll be a bank suspense account.
Now if you're paying straight from your account, the payment is in the pipe by the end of day one and can only be recalled up until late afternoon on day 2 (times vary bank to bank but it's a largely manual process so reality means late afternoon at the latest, just practicality). But though the payment can't be stopped at this point under normal processes, your account still hasn't been debited. So, you could send a BACS payment and then draw the funds out by other means, then have the BACS payment go through on day 3 even though you have no funds to pay it.
So, banks generally protect themselves from this with fund sequestration- your money'll be debited on day one and put in a suspense account then that'll be debited on day 3. (NB companies or individuals with BACSTEL-IP access are different, but the banks use different methods to offset that risk)
If it's a problem, CHAPS is same day.
GaryLake - Member
"I don't buy into this "so they can make money on it" rubbish. Surely they're constantly playing with your money and profiting from it anyway. They don't need to hang onto your transfers for 3 days in order to play on the stock market with it... "
QFT. It's a zero-sum game, people think the bank are trying to profit from the extra 2 days but the exact same process means that they receive all funds sent to them 2 days later.
PS yes obviously I work for a bank but don't worry, I'm giving it up as a new year's resolution
