is a standing order better than a DD? etc

shagzdan

Hi all,
Does anyone know the difference between a standing order and a Direct debit?

The reason I ask is that LLtbsbank let me overdraw last week by honouring a Direct debit.
I seem to have no way of trickling money into my savings account without thie risk of overdrawing my current account.

I want to save but I have a meagre salary of around 15k, my monthly outgoings total around £750 as I have a small family, I have an isa too thanks to Martins book!

Also,
When ive saved my cash for a year in a mini isa, what happens, does the interest continue, can I keep it etc..

[Deleted User]

my understanding of this is -

A standing order is a payment instruction you set up telling the bank to pay a certain person/company x amount of money. The amount remains the same until YOU change it. You can stop the arrangement whenever you like.

A direct debit is an authority for another person (usually a company) to take an amount from your account. (This amount can vary). Whilst you can cancel the D/D from your end - unless it is cancelled from the other end too, it can still continue to be paid and you have less control over it.

DiggingOut

Also,
When ive saved my cash for a year in a mini isa, what happens, does the interest continue, can I keep it etc..

The interest remains in your ISA and it continues to earn interest on both the original amount saved and the interest earned so far. You can take any of the money out (original savings and/or interest) and use it for whatever you want/need, but once taken out it can't be put back in to the same ISA.

Once your annual ISA allowance is used, it can't be used again, even if you have taken the money out.

shagzdan

So,
if for instance I save the current limit of £3000 within the alloted tax year, then does the interest above and beyond £3000 get taxed.
So if ive got £3001 and its earning interest, I will get taxed on the interest right?

What if I saved 3k does that mean every year I could bag the interest only and at 4.25% that would only be £127 but it's worth it.

Pal

No. The interest in a cash ISA is always tax free (at least until Gordon Brown decides to change the rules again).

£3000 is the maximum you can pay into a cash mini-ISA in each tax year, but the amount in the account can grow tax free above that figure.

allydowd

Direct Debits are covered by a protection system. You can read about it below:

Direct Debits link