A direct debit refers to an arrangement where you authorise a service provider, such as a utility company or a subscription service, to automatically withdraw funds from your bank account on a regular basis.
It is a convenient and automated method of making regular payments.
Direct Debit Example:
For example, if you have a £30 monthly gym membership, instead of manually making payments each month, you can set up a direct debit with your gym.
By providing your bank details and authorising the gym payment, they will automatically deduct the agreed-upon amount, such as £30, from your bank every account every month on a specified date.
A direct debit eliminates the need for manual transitions and ensures timely payments.