Why does it take up to 5 days for electronic money tranfers?

Question

Where does the money go/reside after electronic transfer from one bank to another (excluding weekends & hols.) that takes up to 5 working days?

Answer 1

Plainly it doesn't ... as the other respondents have said, it's so the Banks can hang onto you funds for 5 days and earn Interest on it ...

HOWEVER be aware that 'confirmation' takes even longer ... sometimes up to 6 MONTHS longer ...

There is a well known scan were some scum in Nigeria (or similar) offers to send you a cheque for £5,500 and says you can keep the £500 if only you would forward the £5000 by Western Union back to him.

So you get the Cheque, take it to your Bank and wait 5 days. The money appears in your account so you think 'so that's OK then, I'll send off the £5000..' - next month you find you are overdrawn by £5535 - when you complain, the Bank tells you 'the Cheque was bad' ... you say 'but you cleared it !!" ... they say - 'but it wasn't 'confirmed' by the other (Nigerian) Bank...' .. so you then say - 'How do I get my money back from Western Union ??' .... (Ha, Ha, Ha, Ha, Ha) ...

.... the extra £35 ? that's because you presented a bad cheque .....

Answer 2

It means that both banks can have it in there accounts for a couple of days, make their little bit and then let you have it. Its the same with cheques. In the days of IT, it could all be done almost instantly, just like email. Its a nice little scam they have going.