what is the difference between direct debit and standing order?

Answer 1

A standing order is an agreement between you and your bank/building society to pay a specified sum on a specified date at specified intervals. The Bank makes the payment on your behalf and you can amend the details or cancel the payment at any time by giving your bank 48 hours notice.

A Direct Debit is an agreement between you, an organistaion and your bank becomes the third party. The organisation are responsible for collecting funds from your account and advising you how much they will be taking, how often and on what date. The Bank do not have any control over these elements. A direct Debit must be cancelled first and foremost with the organisation and secondary with your bank.
As such there is in place a Direct Debit Gaurantee which states that if an amount taken from your Bank account by direct debit is incorrect eg Amount Differs, Frequency is wrong etc you can ask your bank to refund you. The bank will then get the money back from the organisation.

Answer 2

A direct debit is when you give permission for a company to TAKE an agreed amount from your account (which can be variable).

A standing order is when you instruct your bank to SEND an agreed amount to a person or a company.

You can cancel either at any time by ringing your bank or via internet banking. If you cancel a direct debit without telling the other party first, they will contact you and ask you why, but you're perfectly entitled to do that. (You might still owe them money though which is a separate matter).

Answer 3

a direct debit is set up by the person or company that you are paying and they take the amount advised to you each month (this can vary).

a standing order is set up by yourself and you choose the amount and date's of payments. You have more control over standing orders.

However, if a direct debit is taken without your permission the bank will guarantee to return the money to you. You cannot do this with a standing order, once it is paid it is your responsibility to get any money back which you didn't authorised (unlikely as you advised the so)

Answer 4

Hello there,
A Direct Debit is an instruction from the Customer to their Bank allowing an organisation to collect varying ammounts from the bank account.

With a Direct Debit you are covered by the Direct Debit Guarantee which means:
If the amounts to be paid by Direct Debit or the payment dates change, the organisation collecting the payment will notify you normally 10 working days in advance of your account being debited or as otherwise agreed.

If an error is made by the organisation or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid.

If any payment is made in error, you should contact your bank or building society who are responsible for giving you a full and immediate refund - even if the original error was made by the organisation collecting the payment.

And you can cancel a Direct Debit at any time by contacting your bank.

For More information: http://www.bacs.co.uk/BPSL/directdebit/generalpublic/directdebitoverview/

A standing order in is an instruction from a customer to a bank or building society to regularly transfer a set amount of money to another bank account, either at the same bank or elsewhere.

Standing orders can be set to run for a particular time, and cancelled by the customer at will.

They are typically used to pay for ongoing and unchanging expenses - including rent, charitable donations, mortgages, line rental, or a fixed-rate loan.

Only the customer initiating the standing order can alter it. If there is insufficient money in a customer's account to cover the standing order, the payment is skipped.

For more information: http://www.bizhelp24.com/cash-flow-control-/standing-order-or-direct-debit--2.html

In Short:
Direct Debits - For varying amounts such as utility bills.

Standing Orders - For fixed amounts such as rent.

Also note, some bank accounts place restrictions on standing orders or direct debits... It is worth checking how your particular bank handles them.

Hope that helps.

Answer 5

A standing order is an instruction you give to your bank to pay someone else. It's your bank's responsibility to pay it. Once it's paid, you can't claim it back unless the person you're paying decides to give you a refund.

Direct debits require you to give someone else authority to take money out of your bank account. It's their responsibility to collect it. If they collect the wrong amount, you can ask your bank to claim it back.

Now imagine an insurance company collecting millions of premiums. If they collect by standing order, they have to check every payment that comes in and match it up to their policy records. If they collect by direct debits, they get one big lump of money from the banking system, with a list of all the policies where the premium HASN'T been paid. That's a lot cheaper for them to administer.

Answer 6

a direct debit - the company you are paying claims the money from your bank account, this can be varied amounts and on varied days, although they should tell you if this changes a standing order - is set up by you and paid by your bank on a chosen date and a set amount - this means you and your bank have more control over this

Answer 7

a standing order takes out the exact amount which is set for certain dates, they can take no more no less, a direct debit can take a different amount each month (ie phone bill not always the same amount), and they can take it out up to three days after due date, if you have a standing order set up and it falls on a bank holiday they can not take it the next day or whatever day they choose!

Answer 8

A direct debit can vary in the amounts taken every month from your account and the days can vary, whereas a standing order remains the same and is taken from your account the same day every month.

Answer 9

Mas is right. You also have more control over a standing order than you do with a debit.

Answer 10

A direct debit is where you give someone permission to take money from your account.
A standing order is where you send money from your account to someone else.