Paying a cheque to yourself

ok, a bit academic but a neighbour's child asked what would happen if you wrote out and paid in a cheque to yourself (same account).

My immediate reaction was that the bank would find a way of holding the money for 4 days and the account would be down by the amount of the cheque.

Another neighbour (bank worker) said that the effect would be neutral as the bank balance would go up on paying the cheque in and then go down when it was cleared.

So what's the real answer?

Reply to
AnthonyL
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TRy it! ;-)

Reply to
T.

As an alternative you could try sending yourself a payment by BACS

Reply to
Adrian Boliston

Unless I was operating an interest bearing current account which had no other movement and I was accurately able to calculate the interest and be aware exactly what was a cleared balance I'm not sure that I would be able to tell whether the bank had the use of my money for any amount of time which is why I hoped someone who knew the system might comment.

Reply to
AnthonyL

This is surely a case for Google Answers!!

Reply to
fishman

In message , AnthonyL writes

If you pay the cheque in at the account holding branch, i.e. the drawee, then the effect would be neutral, as the bank worker indicated, but their explanation is misleading because the cheque would not need to 'clear'. It would be regarded as being cleared funds immediately and it wouldnt enter the clearing system.

Reply to
john boyle

In message , Adrian Boliston writes

That would depend on the bank's PC Banking system. If it spotted that the BACS credit was for an account bearing the same sorting code then it might realise that it was really an internal transfer that happened to be to the remitting account. Or the software might spot the 'in/out' transaction. In each case the software would prevent the payment entering the BACS system.

Other wise the debit to the account would happen on day 1 and the dosh would turn up again on day 3.

I think the banks software would spot it though.

Reply to
john boyle

"john boyle" wrote

John, what if it wasn't the account holding branch?

Reply to
Tim

In message , Tim writes

That will depend on how that particular bank handles things.

The traditional method would be that the credit slip and cheque get separated with the credit sent in the Credit Clearing and the cheque into the debit clearing so that they both turn up on day 3 at the account holding branch as cleared funds and a debit.

These days some banks will instantly credit the account with uncleared funds and then the cheque will hit the account on day three and the funds will become 'cleared' on day 3 or 4. Some banks will 'truncate' the cheque as well so that a cleared credit and debit hit the account on day 1.

Reply to
john boyle

"john boyle" wrote

Mmmmm. Would those (credited but not yet cleared) funds attract interest for those couple of days?

Reply to
Tim

The answer is: The world has so many problems without adding silly little nothings GET A LIFE Lua

Reply to
Luap

Thanks John. I'' relay this information back to my young friend.

Reply to
AnthonyL

In message , Tim writes

Unlikely.

Reply to
john boyle

"john boyle" wrote

OK - so are they available for withdrawal before "clearing"? [I wouldn't have thought so!]

If neither interest accrues, nor the funds are available for withdrawal - then what's the point of "instantly crediting the account" on day one?

Reply to
Tim

In message , Tim writes

It will depend on the banks view of the account holder and its view on whether the cheque is likely to bounce or not. Drawing against uncleared effects to some extent is commonly allowed.

Accounting purposes only.

Reply to
john boyle

IF Destination_account_number = Source_account_number THEN RUN_LETTER_SEND ('TRANSACTION ERROR NOTIFICATION, 'QRY_543334'); -- COMMENT - SEND "YOU ARE A DIPPY DISPSTICK" LETTER. EXIT; END IF;

:)

Arthur

Reply to
Arthur

In message , Arthur writes

!!!! Like it! :-) !!

Reply to
john boyle

In message , Arthur writes

You missed a line out: BALANCE = BALANCE - 10 COMMENT LETTER TARRIF

Reply to
me

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