Direct Debit Versus Standing Order ?

grumbler

MarkyMarkD wrote:

DO NOT DO THIS!
There is no guarantee that the debit will hit your account after the credit - if you time the DD to match pay day exactly, there is a significant chance the payment will bounce and you will be charged....

jb478914 wrote:

i concur, never have a DD going out on the same day funds are due in...have the cleared funds in the day before the DD goes out

...unless you have agreed overdraft limit high enough ...
I have high agreed ovedraft with Nationwide (never use it for othere purposes)and I always transfer money to flexaccount from e-savings account the same day when DD(s) take place and I already see my flexaccount overdrawn (within agreed limit of course).

Milarky

Agree with the comments about caution when relying on direct debits - yet standing orders are not as 'under control' as they might be if the instruction doesn't take account of actual funds in your bank on the day. That's why a manual 'BACS' payment is probably better than a SO, depending on the type of account you have [Lloyds, for instance - a 'clearing bank' - will 'accept' an instruction to make payment to your cahoot account - it just won't action the instruction 24 hours! Nationwide - a building society - has no problem commencing a transfer immediately!]

Debits into cahoot: I recently paid a cheque to the bank on Monday and initiated a DD collection for this amount for Friday [the earliest cahoot allows, I believe] on the assumption that by Thursday the funds would be treated as cleared, I could see this by then, and that the DD would proceed. And that is just what did happen. A bit risky I know, so I asked cahoot in advance how close to DD collection date I could amend [cancel] my instruction should the cheque not be treated as cleared the day before - and they replied: anytime up to the day before. That was some reassurance to know. I had gained the impression with DDs that the funds are actually in transit from the feeder account two days earlier than they appear to 'move' instantly between accounts. [Perhaps that is not how it happens in detail?]

exel1966

Thanks for all the replies guys

To be honest it seems to me as if it's a real minefield out there when it comes to this sort of thing. I'm pretty new to this !! I've read all the posts and the links and am now quite
Was going to go with the DD 1 day after my salary has been paid in to be safe, but am now curious as to how long a manual monthly BACS payment would take to go through and how long it would be before it started paying interest. That would of course increase the hassle factor by having to do this by remebering to do this regularly.
From the other posts it seems as if interest would be payable via the DD or SO method the moment it left the LLoyds account even though It wouldn't be cleared for 4 days. Is that right ?
On the other hand I could just open a new account current account with Cahoot and do an internal same day transfer with them, but still keep the LLoyds Gold Account for the free benefits i get.

Indispensable_Hobbes

I'd prefer SO when moving money on a monthly basis cos you can amend the date everytime so you can make sure its moved on a monday and therefore credited by wed/thus (if your lucky) instead of a DD set for 01 of the month and that being a wednesday then losing interest for the weekend.

MarkyMarkD

Eh Jenny? If the DD is set for a day which ends up being a Wednesday, the money would be transferred on the Wednesday >>> no loss of interest. I'm not sure I see your point. You ALWAYS lose interest with SO; you RARELY (if ever) lose interest with DD.

Grumbler - I have made the authorised o/d point many times before and I was just being lazy by failing to mention it - thanks for doing so.

Indispensable_Hobbes

hmm. maybe im just being stupid? more than likley

Indispensable_Hobbes

I know there was a reason I used SO, cos the account I opened didnt allow DD... I called Halifax today as I am opening a monthly saver on sat and they said I can only use SO with that account.

My A&L ISA has £2k in this morning (uncleared) and my current account was down £2k so thats ok. Its only my old reg saver that was SO i think ING is DD, A&L is DD...

SO yeah, DD would be the obvious one to go for ...