A standing order is a form of payment which allows you to pay an organisation or individual a fixed amount of money for a specified length of time. Once you set up a standing order, the money comes out of your current account on the same date each month and is given to the payee. Standing orders can be used for a range of different regular payments which you may make and are a handy way to make these payments without having to physically draw the money out of your account each month.
How Do I Setup a Standing Order?
You as the payer are responsible for setting up the standing order through your bank or building society. Standing orders can be set up using your online banking, mobile banking app or in person at your bank. You must fill out a standing order form, stating the amount you want to pay each month, the date you want the money to be paid and the account details of the person or organisation you want to pay the money to.
Once you have set up a standing order, your bank will then pay out the agreed amount on the agreed date to the payee each month. Most standing orders will have a specified time period, for example you can set up a standing order to pay £20 on the fifth of each month for a period of 12 months.
Standing orders are set up when the regular payment is a set amount each month, rather than an amount that might vary.
What Can I use a Standing Order For?
You can use a standing order for many types of regular payment such as rent, magazine or TV subscription. Basically, any form of payment where the amount is fixed each month. You can also use a standing order to pay money into the bank account of an individual. This could be a friend or family member or a dependent who you send money to regularly. You can also use a standing order if you want to pay a set amount from your current account into a savings account each month.
When is a Standing Order Not Suitable?
If you have something like a phone contract or a gas or electricity bill. This is because the amount that you pay for these each month can vary depending on usage. A standing order can only be for a fixed amount over a set amount of time. In this case, a direct debit would be more suitable.
Advantages and Disadvantages of Standing Orders
Advantages of standing Orders
Standing orders are easy to set and allow you to control payments from your own current account. They are flexible in that you can make regular payments to individuals as well companies. They are also a handy way to save money by automatically moving money into a savings account each month.
Disadvantages of Standing Orders
Once you have set up a standing order, you cannot alter the amount you pay. If you want to adjust a regular payment, you will have to cancel the standing order and set up a new one. Standing orders can only be set up for a fixed amount, so aren’t suitable for some forms of payment where the amount due can vary each month, in these cases, a Direct Debit would be more suitable.
Can I Setup a Standing Order with my Suits Me® Account?
All Suits Me® account types (Premium and Premium Plus) have full banking-like features including the ability to create standing orders and direct debits.
Don’t have a Suits Me® account? Open your account today in less than 15 minutes and gain instant access to your online account and free mobile app to start managing your finances.
