Published in July 28, 2021
Direct debit is a type of transaction that allows you to directly debit your pay into your savings or checking account. It’s a fully digital transaction, meaning it’s more convenient and secure. It also tends to be quicker than other types of transactions. Apart from getting your payment, you can also use direct debit to make payments. Those payments could be anything such as paying bills, rent, or even your mortgage payments.
Essentially, anyone can use direct debit. It’s most commonly used for payslips. You can receive your salary through direct debit as long as your employer uses it too. It’s eligible for any employee regardless of the type of pay (hourly or annually).
To sign up, you’ll have to complete an authorisation form. It’s a simple and quick process that can be done by your employer, real estate agent, or even your electricity provider.
Visit Moneysmart to read more about the direct debit.
The process may take anywhere from minutes up to 10 business days because of standard banking procedures. Therefore, some organisations may hire employees at the start of the paying cycle purposely. That helps authorise the process by the time the new employee receives their first payment.
You have the option to split your payments into different accounts. If you choose to do so, you’ll have to specify all the accounts on the authorisation form, including the specific amount in each. It’s best to always set up your payments the day after your payslip, so you’re guaranteed to have money in your account. You may face dishonour fees if your account overdraws.
Yes, you can! You can easily direct debit into your saving or checking account regardless of which bank or credit union you’re with. It’s the same process for online banks.
Want to read more banking tips? Find out how transferring funds work here!
While we at Tippla will always do our best to provide you with the information you need to financially thrive, it’s important to note that we’re not debt counsellors, nor do we provide financial advice. Be sure to speak to your financial services professional before making any decisions.
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