Martin Newell’s Joy of Essex: Where does your money go while it is in the charge of various banks?

What do the banks do with your money?

What do the banks do with your money? - Credit: PA

At a time of year when the mysterious subject of money will be at the back, if not directly in the forefront of many minds, I’ve attempted to write something about it, a thing which I rarely do.

I have in over 45 years of paid employment learned a few useful things about money: The first is that sometimes it can be a morale booster to measure your wealth, not by how much you own, but by how little you owe. Is someone on 40k a year with a 200k mortgage necessarily better off than someone on £15k a year with no mortgage? Another thing which I’ve learned, is that if you want something and don’t have enough money for it, unless it is an essential bit of kit for your job, then don’t buy it. If you haven’t got it, why try to spend it?

When I finally bought a house, aged nearly 46, upon trying to secure myself a mortgage, because of my occupation, musician/performer/writer, I had more than average hurdles with which to contend. The standard 5% deposit, I was informed, would not be enough. The lenders would be looking for at least 10%. I offered them 13%, which I’d saved up. “Do you have it?” they asked. “Would you like me to bring it round in used banknotes in a plastic bag?” I countered.

There would have to be a credit check, they said. A few days later I was informed that there would have to be a further, more detailed check. It seemed that because I’d never owned a house, or a car and had never been in debt, I was under suspicion. Much to their surprise I was able to show them three good years, of well-kept accounts.

During this time, the late 1990s, there was much talk of the advisability of taking out mortgage insurance. When I tried to insure my job, however, I was informed by various insurers that the premiums would probably be unacceptably high for me. The job of musician-perfomer is apparently regarded as a high-risk occupation.


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To cut to the chase, as a first-time buyer with vacant possession, there were now only three months of fiddling about until I finally moved into my little house. A fellow performer related a worse experience. He was refused a mortgage outright. So he went away, saved up over several years, and eventually bought a terraced house in the coastal town where he was born – cash money. His reward? The tax people investigated him. They wanted to know how he’d done it.

This, ladies and gentlemen, is how the system will sometimes treat honest working musicians, artists and writers, who by their own endeavours manage somehow to scrape a living. To the surprise of many, we keep books, we pay our taxes on time, we watch our spending and a few of us could even give lessons on solvency to certain types of business people who’d possibly look down upon us.

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What I need to learn about next, however, is international banking and exchanges. Where, for instance does your money go while it is in the charge of various banks?

This is probably too much info but thanks to a stunning bit of collaborative international faffery between a British and an American bank, during the fortnight leading up to Christmas, Newell Industries International never had more than a few quid in our account. By close of trading, at 5pm on Christmas Eve, for the first time ever we were £47 overdrawn. By 6pm, however, we were £937 in credit. The reasons for this? In early December a US record company, having acknowledged that they owed me roughly this sum in royalties, agreed to pay me.

On the 12th of December, they sent a ‘wire’. The clearing period for the money was an estimated three to four working days. Six days later, when it had still not shown up in my account. I contacted them. They had indeed sent it. They emailed me the documentation and their bank’s confirmation.

My bank didn’t know where the money was. I emailed my US colleagues who then asked their own bank. Their bank rummaged around in cyberspace and after a day, found it. There’s been a code problem of some kind. Did they send it on to me? No. They sent it home to the record company in New York. This was 22nd of December. What now, then?

The Yanks and I sort of shrugged helplessly at each other through our emails. I mean, if our two banks couldn’t do this, what were we supposed to do? “Why don’t we Paypal it to you?” asked a bright spark on their side. This was round about midnight. The money appeared in my electronic account at 6pm on December 23. Could I have it then? I asked them, through Fawlty-esque gritted teeth. Not yet, explained a helpful lady in their call centre, there would be a mandatory 24-hour clearing period. Hence my money, now minus a 3% skim, arrived just after close-of-play (and present-buying) on Christmas Eve.

In a way this was good, since it’s allowed me to pay my current tax bill. I did also have a small contingency plan so Christmas wasn’t a complete disaster. But I’d still like to know what the world’s banks did with my £937 between the 11th and 24th of December 2014. No. Really. I’m fascinated.

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