Standing order (banking)
From Wikipedia, the free encyclopedia
A standing order is an instruction a bank account holder gives to his bank to pay a set amount at regular intervals to another account. The instruction is sometimes known as a banker's order.
They are typically used to pay rent, mortgage or other fixed regular payments. Because the amounts paid are fixed, a standing order is not usually suitable for paying variable bills such as credit card, or gas and electricity bills.
Standing orders are available in the banking systems of several countries, including the United Kingdom and the Republic of Ireland, as well as the Netherlands and presumably many other countries.
[edit] Country differences
[edit] UK and Ireland
A standing order can be set up to run for a set period of time, or indefinitely. They can be cancelled at the account holder's request.
[edit] The Netherlands
Standing orders (periodieke overboekingen) are not available for a set period of time. They run until cancelled.
[edit] Difference with direct debit
Standing orders are often confused with direct debits. Both are methods of setting up regular transfers of money from one account to another, but how they are set up and operate is quite different.
- A standing order can only be set up and modified by the payer, and is for a set amount to be paid at a regular interval. The amount can be paid into any other bank account.
- A direct debit is set up on the request of an organisation to be paid, however the payer must first give their bank or the payee permission for the direct debit to be set up. The organisation can request variable payments at variable intervals. The customer has no control over these payments, but can cancel the direct debit and request the return of disputed payments. Individuals cannot set up direct debits between each other, only organisations that have a contract with the bank, or have been vetted by the bank. For details and country differences, see direct debit.
