A Fin24 user wants to know how he can avoid bank penalties for debit orders that go off on a public holiday, as he is not in control of this. He writes:
I have a home loan with one of the banks, and the debit order goes off on the 25th of every month. I noticed that my bank (FNB) does not deduct the money when the 25th falls on a Sunday or a public holiday and slaps me with interest for that day as was the case in December where they charge me interest for two days - 25 and 26 December. Is that legal?
Tommy Nel, head of credit at FNB Home Loans responds:
Like other South African banks and as a function of the current National Payment System, FNB is unable to debit customers’ accounts with their loan repayment on non-business days.
This unfortunately does mean that customers will be charged additional interest, effectively in terms of the amount of the monthly repayment, for the delay between actual billing date and the day that their debit order runs on the account.
It is important however to note, that in this regard, clients will in fact benefit as a result of having the funds in the source account for the period of this delay as well, and in many cases this would be at the higher rate of interest that they would pay on their current account, i.e. when the current account is in overdraft.*Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
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