Security groups not working on domain

I have a windows 2008 sbs server and have created a folder on the d drive which I want only certain users to be able to access.

So I created a domain security group and added the users I wanted to have access to this group.

Then set this security group to this folder with full access rights.

However when I try and access the folder with a user from this group it says "access denied".

If I add the users individually it works ( but defeating the point of security groups ).

Also if i give the permissions to the "Domain Users" group this works for all users as expected.

There are no deny permissions on the folder what so ever.

So why will it not work for the users added to the security group, but it will work for them when added indivdually as a user?