From what I have gathered, whenever I transfer money from my bank account into my mortgage account, Bank of Ireland holds the funds for two or three days in what they call their "mortgage holding account". I had noticed it in the past (where my monthly repayments would not show up in the mortgage until a few days later), and also recently when I did a lump sum payment (and again took three days to show up in the mortgage account). It is when I inquired the bank when they told me about this "holding account".
I assume that, if they do this for all mortgage accounts, the bank can maintain a pretty large balance (many millions) in this holding account. And they can use this balance to make further profits.
I would not be surprised if this is a widespread practice. But - is this actually legal? Can the bank artificially hold on to these funds in order to make extra profit? Note that they do that at the customer's expense (i.e., I'm paying interest during those additional days).
Apologies if I've completely misinterpreted what is happening here - maybe somebody can clarify it for me.
Thanks.
I assume that, if they do this for all mortgage accounts, the bank can maintain a pretty large balance (many millions) in this holding account. And they can use this balance to make further profits.
I would not be surprised if this is a widespread practice. But - is this actually legal? Can the bank artificially hold on to these funds in order to make extra profit? Note that they do that at the customer's expense (i.e., I'm paying interest during those additional days).
Apologies if I've completely misinterpreted what is happening here - maybe somebody can clarify it for me.
Thanks.