A standing order is an effective and reliable way to save money. We use standing orders for many regular transactions, such as paying rent or other bills, and they are convenient ways to make sure such payments are up to date and not missed. However, you can also use a standing order to save money by putting an amount away each month in a savings account.
What is a Standing Order and How is it Different from a Direct Debit?
A standing order is a regular payment you set up from your bank account to another account. This could be monthly, quarterly or annually.
A standing order differs from a direct debit because that amount paid out each time is fixed. That is why a standing order is good for rent, where the amount due does not change.
How do I Setup a Standing Order?
To set up a standing order, you can either do this by contacting your banking provider and supplying them with the account number and sort code of the bank you wish to make the regular payment into or you can use your mobile banking app or online banking account to set one up yourself. In the case of rent, this could be the bank account of the landlord or letting agent. You set the amount and select whether you want the payment to continue indefinitely or stop at a specific date.
Standing orders can be set up in your bank’s branch, over the phone or online. You may also be able to set up a standing order using a prepaid debit card. Because a standing order involves paying out a fixed amount each time, you must make sure that you have enough funds on your card on the due date of the payment.
How can a Standing Order Help with Savings?
You can set up a standing order to be paid into most accounts, including savings accounts. By using a standing order to regularly move money away from your everyday spending balance, you are making sure that you are putting some money away. You don’t have to remember to transfer the money each month to your savings account; it is automatically done for you.
Making regular savings can be a great way to ensure you are financially secure for the future, and with a standing order, you can make sure that a fixed amount is put aside before you start spending the money in your current account.
Why Saving is Important for Financial Wellness
Financial wellness means feeling more secure about your finances and being able to deal calmly with any money issues.
Even putting a little bit aside each month can help you feel more secure about your financial future. When setting up a standing order to pay into a savings account, it’s essential to spend a bit of time working out all your monthly outgoings to give you a realistic idea of how much you can save.
Once you decide on the amount and set up your standing order, you will feel secure in knowing that you are contributing to your feeling of financial wellness.