A standing order is a simple way to make automatic payments from your bank account. You just need to instruct your bank to pay the required amount at regular intervals - perfect to pay bills of a set amount, like your rent or a subscription service.
And because you fix the amount and frequency of payments, you’re always in control.
This guide covers all you need to know to set up a standing order, as well as some common uses for standing order payments.
Plus, to help you save money when sending international payments, we’ll also introduce Wise.
|Open the world’s most international account for free with Wise, without any monthly fees. Hold, send and spend 50+ currencies, get bank details for free in more than 9 currencies and send money abroad with low and transparent fees.|
Let’s start with how to set up a standing order with your bank or credit union. While the process will vary between banks, the basic steps are usually the same:
- Log into online banking, head to a branch, or call your bank’s customer service team
- Find your bank’s standing order form, which may be online or in hard copy
- Complete the standing order request form, including details of the recipient, the amount to be paid and the dates of payments
- Your bank will process and set up the standing order for you - this may take a few days
- Standing order payments will be sent from your bank account to the designated recipient according to your instructions - you don’t need to take any further action
With a standing order you’re giving your bank permission to make a payment on your behalf to a company or organization. Payments should be of the same amount every time, and go out on a regular frequency - once a month on the first of the month, for example.
Standing orders are used for regular and recurring payments of a fixed amount. You might choose a standing order to pay things like:
- Your rent or mortgage
- Regular subscription service fees
- Fixed payments or remittances to friends or family
- Business payments like regular, fixed retainer costs
Standing orders are very useful and can cut down on the time you spend managing your money. Simply set up the payment once and it’ll be processed according to your request - far easier than having to remember those bills every month.
However, standing orders aren’t the only way to make automatic bank payments - and they do have a few limitations. Here are some standing order pros and cons to consider.
- Set up your standing order once, and you don’t need to remember to make future payments or mail in checks. Just make sure there’s enough in the account to cover the cost
- Easy and cheap - or even free - way to set up automatic payments from your bank account
- You retain control over the payments you make with standing orders - the organization can not change the amount or date of payment
- Getting your bank to pay a standing order requires advance notice - it’s not for immediate or urgent transfers
- With standing orders, banks can only pay a fixed amount to the recipient - which means you can’t use this for variable bills like utilities
- Customers don’t have protection if a payment is made incorrectly in the same way as they do with direct debits
Direct debits are another popular way to arrange recurring payments direct from your bank account to a company or organization.
Direct debits are different to standing orders in a few ways. When you want to set up a direct debit, you’ll complete a mandate or request form which authorizes a company or organization to collect money directly from your bank account.
The company is then in control of the date of payment and the amount being transferred - although the customer will always know in advance what’s being deducted and when.
In some sense, this makes direct debits more flexible than standing orders. You can use them for variable payments where the due date or amount might change from time to time - paying a credit card or utility bill for example.
Let’s take a look at the key differences between standing orders and direct debits - you can also learn more about direct debit payments in this handy guide.
|Standing order||Direct debit|
|Setting up||Set up your standing order through your own bank - this is usually possible by completing a standing order form on your regular online banking page|
Complete the recipient organization’s direct debit mandate
|Cost||Free or low cost||Usually free|
|Failure rate||Payments are processed automatically as long as there are sufficient funds in your account||Payments are processed automatically as long as there are sufficient funds in your account|
|Flexibility||Payments are set at an amount and frequency decided by the customer||Payments can be made of variable amounts and frequency - but the customer must know in advance of the payment date and amount|
|Customer protection||Low||High - customers can get a refund if payments are incorrectly processed|
If you need to send or receive international payments, you could be better off with Wise.
Wise currency exchange always uses the real mid-market exchange rate with no markups and no hidden fees. So you get the best deal every time when you send, spend or receive money in foreign currencies.
Open the world’s most international account online and for free, to hold 50+ currencies, and make payments to 80 different countries. You can even automate regular transfers using direct debits.
Get your own receiving account details for 10 different currencies to get paid like a local in major currencies like USD, GBP, EUR, AUD and NZD. You can also get a linked Wise debit card to make mobile payments through Apple Pay or Google Pay, pay merchants in person around the world, and make ATM withdrawals. What’s not to love?
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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