Standing Orders
Why is there a gap between the time my account is debited and the time the money arrives at the recipient?
Banks and building societies need to assure funds are available in the payer's account prior to crediting a payee. These payments (if they are passing from one bank to another) enter the automated clearing (also known as the Bacs clearing). The payer's bank submits the instruction to the clearing on the first working day (Day 1) when the payer's account is debited. The payment is processed and reaches the destination bank on Day 2, which updates its accounts and makes funds available on the destination customer's account from the start of Day 3.
Today (Sept 2010) 57% of all standing orders are processed as Faster Payments. To check if your bank processes standing orders as Faster Payments, please click here.
What are the best uses for standing orders?
They can be used to pay regular bills, but the main advantage of a standing order is that this payment method allows any bank customer to transfer money on a regular basis to any other customer of a bank or building society.
Why do many companies seem to prefer Direct Debits to standing orders?
A standing order instruction is for a fixed amount. The customer must sign a new instruction whenever the amount changes, however Direct Debit Instructions are for variable amounts, which means that the company simply informs the customer in advance if the amount of the payment changes the customer doesnt have to sign a new instruction each time saving time and adminstration costs for the company.
What will I be charged for a standing order?
Over 75% of current account customers do not pay any transaction charges for standing orders, direct debits, cheques etc. Where charges are made, these will be a matter for the commercial judgement of the institution concerned.