Welcome to The Sprout! Please sign up or login

Information » Money » Banks and Building Societies » Direct Debit and Standing Orders



Direct Debit & Store Cards

The difference between Direct Debits and standing orders

  • Direct Debits give a company permission to take money from your bank account on an agreed date
  • Standing orders give the bank an instruction to pay an exact amount to another account regularly

Direct Debit

A Direct Debit is an instruction to your bank or building society to automatically deduct a sum of money from your account to pay an organisation on a regular basis. This will be set up by you and will take out a pre-arranged amount of money on a set date, usually once a month.

It is a common way to pay for bills, charity donations, insurance or loan repayments.

There are several benefits to having a direct debit:

  • It ensures you do not miss payment dates and incur extra charges
  • It allows you to spread the cost
  • It is safe and reliable and offers a money-back guarantee if anything should go wrong

Before you arrange a Direct Debit, find out exactly how much you will be paying and how often. Sometimes you will pay less overall by paying by direct debit and sometimes you might be paying more. Do your maths and choose wisely. This app can help you keep track of your Direct Debit payments.

You will also need to find out about the cancellation policy of the organisation you are paying by Direct Debit, in case you wish to cancel the Direct Debit at any time.

A Direct Debit can be arranged by calling your bank or building society. Sometimes the organisation you are paying will arrange this on your behalf with your permission, but always check with your bank what has been arranged before you make any payments.

A Direct Debit can be cancelled by calling your bank or building society. Notify the organisation you are paying of this cancellation. If you are worried about direct debits, talk to your bank or building society or an adviser at the Citizens Advice Bureau or look at the Money Advice Service site.

Standing Order

A standing order is similar to a Direct Debit. It is an arrangement to transfer money from one person's bank account to another's on a regular basis, but it can take up to three or four days for the money to arrive in the new account, unlike a Direct Debit which is instant.

This time is needed to ensure the requested funds are available in your account before they are moved into the payee's account. Although it is a slower process than a Direct Debit, it will transfer funds faster than a cheque.

If you are using a standing order to pay for bills or repayments, allow at least three to four days before the payment date is due to create the standing order. This will avoid being charged for a late payment if the funds don't clear in time.

A standing order can be arranged with your bank or building society. Like a Direct Debit, make sure you understand how much and how often your account will be debited.

You can contact the Money Advice Service on 0300 500 5000 (or 0300 500 5555 for Welsh) Mon - Fri 8am-8pm, Sat 9am-1pm. There’s also an online chat function on their site.

You can contact Meic for free via online chat, text (84001) or phone (080880 23456).

Got something to say?

You must be logged in to post comments on this website.

Login or Register.

Please take a few minutes to complete this survey. It will help us find out how you use the website so we can keep improving it for you. Everyone who completes the survey will get the chance to win £50.