Banks earn interest on dole money.

Gary L · 26-09-2011, 12:31

I found out today that people on the dole and getting their money paid into 'bank' accounts get their money a few days after the banks keep it for earning interest on it.

so if you sign or whatever on a Wednesday. you would get your money on the following Monday because the banks hold on to it to earn interest on it.

so in theory as soon as somebody signs on and a few buttons are pressed on the computer. the money is automaticaly sent to their bank account to take out. well it would but the banks keep it for 3 days or more before giving you access to it.

I bet you didn't know that did you.

Tim Deegan · 26-09-2011, 12:36

That's how banks make money, they invest it. They don't discriminate between dole payments, or money from any other source.

**Hugh** · 26-09-2011, 12:36

It is treated the same as any money going through the clearing system.

Gary L · 26-09-2011, 12:39

it's something to do with it being taxable. some benefits are not taxable so the banks can't hold it to earn interest on.

**Paul M** · 26-09-2011, 12:51

Quote:

Originally Posted by Gary L

so in theory as soon as somebody signs on and a few buttons are pressed on the computer. the money is automaticaly sent to their bank account to take out. well it would but the banks keep it for 3 days or more before giving you access to it.

I bet you didn't know that did you.

I bet I didnt really care either

On what evidence do you base this btw ?

Welshchris · 26-09-2011, 12:52

now i was always told different i dont know wheather its because Job Seekers Allowence where u sign on is different.

With Income Support/Incapacity/DLA i was always told that the money is put in direct by government to accounts on a particular day so for example lets say i get my money on a Wednesday, it would automatically be put in at 12:00am on that day.

This is why usually they are paid usually on Tuesdays and Thursdays or Mondays and Fridays depending what benefits it is.

nomadking · 26-09-2011, 12:55

How can they earn money on it, when it is held for such a short period? They can't lend it out and earn interest on it.

Gary L · 26-09-2011, 13:01

Quote:

Originally Posted by Paul M

I bet I didnt really care either

You like interesting facts as much as the next guy.

Quote:

On what evidence do you base this btw ?

Bloke in a pub told me

Hugh's missus will confirm it. won't she Hugh

---------- Post added at 13:01 ---------- Previous post was at 12:58 ----------

Quote:

Originally Posted by Welshchris

now i was always told different i dont know wheather its because Job Seekers Allowence where u sign on is different.

With Income Support/Incapacity/DLA i was always told that the money is put in direct by government to accounts on a particular day so for example lets say i get my money on a Wednesday, it would automatically be put in at 12:00am on that day.

This is why usually they are paid usually on Tuesdays and Thursdays or Mondays and Fridays depending what benefits it is.

All them benefits are non taxable so they go in the same day. JSA is taxable and the banks are allowed to hold onto it.

Tim Deegan · 26-09-2011, 13:04

Quote:

Originally Posted by nomadking

How can they earn money on it, when it is held for such a short period? They can't lend it out and earn interest on it.

They use the money to invest on the stock market.

---------- Post added at 13:04 ---------- Previous post was at 13:01 ----------

I may be wrong on this one, as I don't work in banking, and I don't claim any benefits. However from what I understand is that because all banks work slightly differently with regards to clearing, then the money is paid in earlr to make sure that payments are never late. The banks will of course then invest any money that they are holding, just the same as they invest your savings.

nomadking · 26-09-2011, 13:05

Quote:

Originally Posted by Tim Deegan

They use the money to invest on the stock market.

Then they would still be forced to sell the shares quickly because the cash is going to be withdrawn soon.

If they do earn money on it, it is saving people the cost of being charged for each normal transaction, which is the alternative.

Tim Deegan · 26-09-2011, 13:17

Quote:

Originally Posted by nomadking

Then they would still be forced to sell the shares quickly because the cash is going to be withdrawn soon.

Banks aren't quite as hard up for money as that....you can just imagine someone getting on the phone to a stock broker, saying 'quick sell those shares, Mrs Smith is just about to withdraw her pension'

Quote:

Originally Posted by nomadking

If they do earn money on it, it is saving people the cost of being charged for each normal transaction, which is the alternative.

Exactly

**Hugh** · 26-09-2011, 16:55

Quote:

Originally Posted by Gary L

You like interesting facts as much as the next guy.

Bloke in a pub told me

Hugh's missus will confirm it. won't she Hugh

---------- Post added at 13:01 ---------- Previous post was at 12:58 ----------

All them benefits are non taxable so they go in the same day. JSA is taxable and the banks are allowed to hold onto it.

No, as she doesn't work for BACS or deal with JSA.

martyh · 26-09-2011, 18:14

I've never heard so much rubbish in my life ,if you sign on,on a monday you will get your money in your bank or building society via BACS in 3 working days as with any BACS payment .Banks earn on all money that is in your account doesn't matter if it's JS or drug money ,if it's in their bank they are earning money on it ,that's what a bank is

Hom3r · 26-09-2011, 18:33

All you money in any bank/building society is just a group of numbers, and the banks invest it regardless of what account you have, and you have no say.

The amount in your account is protected.

The banks will make more £ fo £ than you will in interest.

I have 2 HISA that when I opened them (1 each for my Nephew & Niece) they had 4.5% interest, recently I found out they have dropped to 0.54%.

**Stuart** · 26-09-2011, 21:00

Quote:

Originally Posted by Tim Deegan

Banks aren't quite as hard up for money as that....you can just imagine someone getting on the phone to a stock broker, saying 'quick sell those shares, Mrs Smith is just about to withdraw her pension'

No, they won't. However, if they lose the interest on well over a million fortnightly benefit payments (I doubt the Unemployment benefit is the only one they profit on) because people have decided it's immoral, the banks might do something.