Definition & Meaning:

A 'standing order' is a type of 'bank transfer'. It is a common way to transfer money from one bank into another. These are used when somebody wants to pay a fixed/set amount of money into another bank account on a regular basis (e.g. every month). 'standing orders' are used for convenience (so you don't have to manually make the 'bank transfer' yourself each time you have/want to).

This is different to another popular type of 'bank transfer', called a 'direct debit'. With a 'direct debit', you give permission to somebody (normally a company) to take money out of your account. It is they who decide how much money and when (although it is normally at regular intervals of time) they take money out of your account. 'direct debits' are a common way to pay bills (e.g. gas and electricity) and loans (e.g. a house mortgage).

Related Vocabulary:

Annual Percentage Rate, Redemption Penalties, The Principal, Fixed Interest Rate, Variable Interest Rate, Preferential Interest Rate.

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