Define Direct Debit

What is direct debit?
Financial Glossary
Define Direct Debit

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.

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