What Is a BACS Transfer?

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A BACS transfer, or banker automated clearance service, allows funds to be directly deposited into a bank from a pay check or directly withdrawn for checks sent to others. Sign up for BACS transfers to get money to and from a bank account more quickly with instructions from a financial consultant in this free video on money management and personal finance.

Part of the Video Series: Money Management & Personal Finance
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Video Transcript

Is your pay check contributed directly into your bank account? Hi, this is Roger Groh with Groh Asset, and today we're here to talk about BACS, or B-A-C-S. In the old days, you used to have to take your pay check down to the bank and hand it over to the clerk, and the clerk would stamp it and put it in to your account, and a couple of days later it would show up. Well, that's changed, really prompted by the consumer's desire to have instant credit to their account for any, for any deposits, and to reduce costs at the banks; therefore, electronic systems were created in order to speed up the process for which you could contribute money in to your account, and take money out. BACS, which stands for Banker Automated Clearance Services, enables you to contribute your pay check directly in to your own bank account. On the other hand, it also enables you to send checks directly to others. So, for instance, if you pay your electric bill online, or if you pay your insurance bill online, that's done through the BACS system. Now, how do you sign up? Well, generally, you have to give the, your employer the name of your bank, and then the numbers that are at the bottom of your checks. Those numbers start on the left. The first bunch identify the bank that actually holds your account. On the right, it's your own account number, so that any contributions are going first to the bank, and then the bank takes that money automatically and contributes it in to your own account. The reverse happens when you pay a check online. You've told your bank online that you want to send money to another bank, and you don't see that happening on your end, but believe me, the same numbers are there. It identifies another bank to send money to, and then identifies another account to send money through, all done through the B-A-C-S system. It's very efficient, it works very well. In Brittan, they are very proud to point out that there has never been an error since 1968, when that system has been created. So, hope that helps. I'm Roger Groh of Groh Asset, and thank you very much for spending time with me.

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