Who keeps the interest when you transfer funds between accounts?

[charttv]

Say you switch cash funds from one account to another, both accounts are with the same bank. It usually takes a few days.

Why is this?

Do the funds go into a bank holding or suspense account which earns the bank interest which they keep?

I have always suspected, can anyone confirm?

I know that cheques and funds can be cleared instantly for a fee or as a favour by a bank worker.

 

[Strannik]

how does that work? mine takes a second to go between accounts

 

[charttv]

how does that work? mine takes a second to go between accounts

Yep, I have the same for some accounts but others or when banking a cheque there is a delay until I can use the funds.

 

[Strannik]

but you don't write out a cheque to put it into your other account in a same bank? or do you?

 

[wylie]

When I bank a cheque it goes in under the deposit date and would earn interest from that date, if the account actually pays any interest even if it takes five days to clear.

 

[RumpledElf]

I think the OP means the mysterious disappearance of money for a couple of days when you are transferring between different banks. Same bank, different accounts it seems to be instant.

Always wondered where the money goes myself. Even the rent I get is supposed to come straight from Centerlink and it goes missing for a day ... as do my mortgage payments, which are transferred from another bank. Some direct deposit eBay payments take 2-4 days. You'd think they'd get it down to instant or close to it in this day and age, but no ...

 

[Strannik]

reality is that banking transactions are usually done overnight as a batch job on some mainframe

so while the application that handles your accounts online withdraws the money straight away, the actual transaction is sitting in a DB until the nightly processing job runs and sends it off to another bank. now when another bank receives it it might be another overnight batch job to load it into a system

so there are your two days.

it all depends on what systems particular banks use and how many of them are involved in processing your transaction

 

[ianvestor]

it all depends on what systems particular banks use and how many of them are involved in processing your transaction

And because of the nature of the beast (huge systems with thousands of lines of code) they're probably all using 5 to 10-year-old technology, if that.

I always wonder why NAB doesn't just keep an account at CBA and visa versa, then when a NAB customer transfers from their account to a CBA account, the money could actually just go from NAB's CBA balance to the new CBA acc... instantly.

It wouldn't be at all hard for 2 banks to have this sort of mutual arrangement, so my guess is they like things the way they are, with the delay.

 

[Strannik]

And because of the nature of the beast (huge systems with thousands of lines of code) they're probably all using 5 to 10-year-old technology, if that.

I always wonder why NAB doesn't just keep an account at CBA and visa versa, then when a NAB customer transfers from their account to a CBA account, the money could actually just go from NAB's CBA balance to the new CBA acc... instantly.

It wouldn't be at all hard for 2 banks to have this sort of mutual arrangement, so my guess is they like things the way they are, with the delay.

haha

try 20-30

that's how they work. called correspondent account
but to for NAB to let CBA know that they need to put some money into your account they still need to run some jobs which would fire the transactions

they don't send messages between banks in real time AFAIK.

it's not that they like it, it's just that there are too many systems involved in processing your transaction.

 

[Pa1nter]

I personally do not do large payments on a Friday,I always set it up to pay Monday,therefore reducing the time they have my money.
In this day and age,it is wrong they take so long.