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Unclear Funds

What does unclear funds mean?
These are funds we are unable to draw on. They have reached our account, but they have a hold on them. We are unable to use them.
 
Why has this happened?
In New Zealand some banks make NZD payments to other banks, by a method that results in funds being received unclear. The sending bank can reverse these funds from our account. 
 
Which banks in New Zealand does this affect?
Payments made from ANZ and Kiwibank, in almost all instances are received by the ASB as unclear funds. Payments from other banks in general are received as cleared funds. 
 
When will these funds clear?
Not until the third business day, after the business day the payment was made. For example, a payment made on Monday, received as unclear funds on Tuesday morning, will clear on Thursday.
 
Can the ANZ and Kiwibank make payments to the ASB in cleared funds?
Yes they can if requested to do so. However because of the lack of knowledge about this issue, often even then, payments are made as unclear funds.
 
My bank says these funds have been sent as cleared funds. Why is this?
In general there is a very poor understanding on this issue among bank staff at a branch level. ​
 
Does this happen in other countries?
In general no. For example, in Australia, AUD payments are received as cleared payments the following day, except when the payment has been made by cheque.
 
Will this affect the exchange rate?
That depends on the size of the transaction, and the margin your transaction has been priced on.  In most instances, we will simply amend the trade settlement date, to the day the funds clear, but in some cases, the rate may need to be amended slightly.