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standing orders & direct debits

what are they?

Standing orders and direct debits are both designed to help you pay bills easily direct from your bank account. They save you writing out cheques or paying by cash, but in both cases you need to ensure you have sufficient money in your account to pay the bill.

A standing order is an instruction to a bank to pay a specific amount of money to another bank account at a particular time. The standing order will normally pay out the same amount of money on a regular basis, weekly, monthly or annually.

The benefits of standing orders are:

	The bills are paid automatically
	You tell the bank how much money to pay and when
	You can cancel the order whenever you want to

you have to be careful to ensure:

	There is sufficient money in your account to pay the bill
	You remember that the money will be taken out of your account when you have told the bank to do so

Your bank will provide you with a standing order form if you want to set up a standing order.

Direct debits are similar to standing orders, but there is one big difference. With direct debits you instruct the bank to allow the company, who presents the direct debit, to say how much money will be taken from your account and when. This can be particularly useful when paying bills such as for gas or electricity. The amount you pay will vary with each bill and so a Direct Debit will enable you to pay the various amounts without having to tell your bank to do anything.

The benefits of direct debits are:

	The bills are paid automatically
	The company who charges you will be able to vary the amount of money they take, depending on how much you owe

you have to be careful to ensure:

	There is sufficient money in your account to pay the bill
	You remember that the money will be taken out of your account when you have told the bank to do so

Your bank will provide you with a standing order form if you want to set up a standing order.

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