Direct Debit

Direct debit is an arrangement made by you with your bank for certain payments to be made to a third party on specified dates. The direct debit amount may be fixed or variable and for different time periods. The third party, the receiver of funds, is responsible for organising the deduction from your account. However, your bank will repay you if it allows an incorrect payment to be made.

Because direct debits offer a lot of discretion to the company receiving the money, they are sometimes distrusted by consumers. But companies which provide regular services to an account holder like them because they can be cost efficient. So expect your mortgage lender, telecoms company or electricity supplier to encourage you to use direct debit.

See Also: Investment Centre Current Account Comparison Service Deposit Account Comparison Service Cash ISA Comparison Service

Last Updated: June 2007 © Moneyextra.com

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