How does the clearing time of BACS compare to that of FPS?

The statement that FPS clears funds in one day is accurate because the Faster Payments Service (FPS) is designed to facilitate near-instantaneous transactions. FPS allows for the transfer of funds 24/7, enabling recipients to receive money almost immediately, usually within a few seconds, although in rare circumstances it might take up to a couple of hours.

In contrast, BACS (Bankers' Automated Clearing Services) is typically used for direct debits and direct credits and has a longer clearing time, usually taking three working days to process transactions. This is primarily because BACS operates in batch mode and is updated only during business hours, unlike FPS, which offers real-time payment capabilities. Therefore, when comparing the two systems, it is clear that FPS is much faster, confirming that it clears funds in one day or less.