A BACS payment can be set up (by you) to electronically transfer money direct from your bank account to a creditor's bank account. This will involve obtaining the creditor's bank details to set up such a payment. Money from your account can then be credited to the creditor's bank account as and when you need to.
A BACS payment can usually take up to two working days to clear.
BACS payments are popular for paying staff - wages are transferred direct from the business bank account to the employees' bank accounts. In fact, today, it is the most common way for an employee to be paid.
1. You obtain the bank details of the creditor
2. You set up a BACS payment with the bank
3. You credit the creditor's bank account with the required amount - debited from your account
Banker's Draft
A banker's draft is similar to a cheque with the exception that the money has already been debited from your account - thus giving the creditor satisfaction that they will be paid the amount required.
You must give notice to the bank that you require a banker's draft (usually 24 hours) so that they can prepare the draft and check that you have enough money in your account. There may also be a small fee to pay for issuing a banker's draft. On picking up the bankers draft from your bank, the amount is immediately debited from your account.
When the creditor deposits the banker's draft in their account, they will be credited the stated amount (which has already been debited from your bank account).
Banker's drafts are common when making a purchase of a high amount i.e. buying a car.
1. You contact the bank (with 24 hours notice) to request a banker's draft for the required amount
2. On agreement, the bank processes your request and produces the banker's draft
3. You visit the bank and collect the banker's draft in addition to paying a small administration fee
4. The amount is debited from your bank account
5. You give the banker's draft to the creditor
6. They deposit the banker's draft into their account which is credited with the stated amount
Internet Banking
If you have access to Internet banking, you can often make payments to creditors on-line. This is a very convenient way of paying bills and transferring money between accounts.
Internet banking can usually accommodate for a number of payment methods - set up and managed by yourself - such as standing orders and BACS payments.
Telephone Banking
Just like Internet banking, you can make payments to creditors using telephone banking. This is a very convenient way of paying bills and transferring money between accounts.
Telephone banking can usually accommodate for a number of payment methods such as standing orders and BACS payments.
TV Banking
HSBC is the only high street bank that currently has a TV banking service (via Digital Sky Television). If you are a HSBC customer and you are registered to use TV banking, you can make some payments using this service.
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