What do value dates and processing dates mean?

Banks may process transactions on a certain day but pre-date (or backdate) to previous days. There are two types of transaction dates:

• Processing date – the day on which a transaction is processed against an account.
• Value date – the date that the funds are meant to be made available to the beneficiary. The money may be deposited the same day or a few days later depending on time zone differences, cut-off times and the policies of the beneficiary bank.

Most transactions have the same processing and value dates. However, there are transactions where these dates might be different. Value dates are used to calculate interest, fees, adjust transactions, e.g. error corrections. Usually such transactions are processed in the morning and pre-dated (given value) for a previous day. There are instances where transaction can be pre-dated (valued) to up to 2 previous business days.