Posted in Finance, Accounting and Economics Terms, Total Reads: 294
Definition: Standing Order
Standing Order is a banking term which means an order from the account holder that asks the bank to pay a certain amount of money at regular intervals of time to another account. It is usually a transfer of rent, or transfer in emergency situations, etc. As the amount is fixed, it cannot be used for paying amounts which are variable such as gas bills, telephone or credit card bills.
It is given in case of purchasing the same items in specified quantities. Advantages include that it is convenient and time saving and efficient at the same time to set a standing order for you.
E.g.: Sheena placed a standing order for 200 chocolates every week.
Standing orders are present in a lot of banking systems but not all such as USA, where payments are made more through cheques and banks automatically mails a cheque to payee’s account.
It is different from direct debits in a way such that direct debits are not fixed and are collected by the payee himself. It needs permit from the payer regarding the frequency of the amount too. Standing orders can be moved from any bank account to some other bank account too.