Find out what you can expect from your bank when you make and receive payments, how long transactions should take, and what to do if you make a mistake.
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Making and receiving payments is one of the main features of a bank account. But how it’s done can vary depending on the way the payment is made.
Different banks will also have different ways of dealing with incorrect payments, so it’s important to know what you can expect when using your account.
Transaction details
To help you monitor your account, banks and building societies must make sure you have the following details available to you for every transaction:
- the date of the transaction
- the amount of the transaction
- a reference (so you can identify who you made the payment to, or where it came from)
In most cases, you’ll get these details via a paper statement, or via online or mobile banking. But you may also get these details through a 'passbook' (a book issued by a bank or building society to an account holder, recording money deposited and withdrawn).
Making a payment
When you make a payment, the time it takes to arrive will depend on how you make the payment. But your bank must tell you the maximum time it will take.
When you make a payment to another bank, your bank must get the money there by the end of the next business day. If the payment hasn’t arrived in the receiving account by the expected time, ask your bank to explain what's gone wrong
Payment to the wrong account
In the UK, payments are made using a sort code and account number.
If you give the wrong sort code or account number when making a payment, your bank must make a reasonable effort to get your money back. But it won’t be liable if you lose any money.
Contact your bank immediately if you’ve made an incorrect payment. Different banks will have different approaches to recovering your money, and you may be charged a fee for the service.
If your bank can’t get your money back, you can ask for details of the person that received the money. This request needs to be in writing. You can then choose to take court action to recover your funds.
If your bank made the mistake and sent money to the wrong account, it must refund the full amount, plus any charges or interest you paid as a result.
Wrong amount paid
If a payment is made from your account for more or less than you asked the bank to send, it must correct the error and refund you for any charges or interest you paid as a result of its mistake.
In some situations, you may be asked to provide your card details without agreeing the amount you’ll be charged. For example, when booking a hotel room or hiring a car.
If the amount you’re charged is more than you could reasonably have expected to pay, contact your bank within 8 weeks of the money leaving your account. Your bank must refund the entire amount or tell you why it hasn’t.
If your bank does refund you, it will then reclaim the money from the company that charged you. You should be aware that the company is then likely to ask you for payment in some other way.
Find out more about unauthorised payments from your account and when you can claim a refund.
Blocking of funds
Sometimes a merchant (a hotel or a car rental company, for example) may want to block funds on your card for a service that’s being offered, or take a deposit. But they can only do this if they tell you the exact amount that’s being blocked.
The blocked funds must be released as soon as possible after the final charge is known or, at the latest, immediately after you tell your bank to make the payment.
Payment refused
Your bank can only refuse to make a payment if:
- you don’t have enough money available in your account
- you have broken the terms and conditions (such as needing to provide 2 signatures for a joint account payment)
- making the payment would be against the law
If your bank refuses to make a payment, it must generally tell you as soon as possible and, if possible, explain why. The bank can charge you a fee if its refusal is reasonably justified.
Receiving a payment
If money is paid into your account, it must be available to you and start earning interest as soon as the bank receives it if it was:
- made electronically, such as by CHAPS, Bacs or Faster Payments systems
- cash deposited at the counter of the bank
- transferred between accounts at the same bank
If money is paid into a cash ISA or a savings account with a notice period, it doesn’t have to be made available immediately. But the bank must start paying interest on the same business day that it gets the money.
The full amount of the payment must be added to your account, unless you’ve agreed with your bank that charges can be deducted first.
Depositing a cheque
When you deposit a cheque into a current account, you should be able to withdraw the money by the end of the next working day.
Online payments
There are many types of online services that can access your account data or make payments on your behalf. For example, you might download a budgeting app to help you manage your spending.
These are collectively known as open banking services.
Any providers that offer these services must be authorised by us. Find out more about account information services and payment initiation services.