What are CHAPS Payments?

I was listening to the budget yesterday and following what was going on via twitter and I really found quite a lot of it confusing and I write about personal finance every single day! Clearly many other people do too and I think that is actually quite a problem.

It got me thinking about how much jargon there is around money, banks and finances in general and how it really can cause confusion. I am now on a jargon busting mission. How on earth can we manage out money properly and make the best decisions around it if we don understand the terminology or services available.

CHAPS payments are something the at often confuse people. CHAPS actually stands for Clearing House Automated Payment System. CHAPS is actually a British company running sine 1984 that offers same day sterling money transfers electronically between UK accounts usually for large sums

Still confused? 

Well what this means to the likes of you and me is this…..

A CHAPS transfer is initiated by the sender to move money to the recipient’s account (at another banking institution) where the funds need to be available (cleared) the same working day

(Thank you very much Wikipedia!)

CHAPS is often used by businesses for large payments e.g solicitors may use it on behalf of people buying houses. The typical fee charged by a bank for a CHAPS transfer is around £35, however this does differ  between banks as does the time of day the transfer has to initiated by to ensure same day transfer occurs. best to check with your opwn bank if they offer this and their timescales.

Well I hope that has cleared that up for you and you can now talk knowledgeably about what a CHAPS payment is.  I will be back with more jargon busting very soon!