Direct Debits for Account Bonuses/Rates/Incentives

Money, investing, mutuals etc

Direct Debits for Account Bonuses/Rates/Incentives

Postby planteria » Wed Nov 22, 2017 10:07 am

as is being discussed elsewhere, with Tesco pulling the ability to pay into their TIS by DD from April 2018, there is a need for alternative Savings accounts, or other DD opportunities.

i have a building society account that is letting me use it for DDs, but they are not allowing new accounts, or changes..

i am using some small DDs to Friendly Societies too..

anyone any other ideas?
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby bobster007 » Wed Nov 22, 2017 1:25 pm

Last I checked BM Internet saving account allows DD to fund account. Well that's how I read the notes/instructions or whatever it is on their website. The interest is 1.3% for the year, then it revert to a savings account at a measly 0.05%.

Incidentally do we know any reason why a fair few banks are dropping customers from allowing to find DD into their savings apart from the obvious. There must be a reason for this?
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby planteria » Thu Nov 23, 2017 1:50 pm

i've seen BM mentioned elsewhere, yes..

what is the obvious reason you have in mind bobster?
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby planteria » Thu Nov 23, 2017 2:04 pm

from the Plum thread..

pabenny wrote:If you want a DD to meet account qualifying criteria, I recommend charity donations.
The return is good karma (or whatever way you see the benefit of helping others) and if you are a higher rate taxpayer, you can gain some additional tax relief on the sums donated.


Charities are an interesting idea, discussed elsewhere. the only problem is that if the donations are small, in order to satisfy criteria, then the 'feel good' would probably be a bit hollow as the costs to the charities of collecting DDs could be significant as a proportion of the donation. i'm open to anyone who knows more re. this.
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby bobster007 » Thu Nov 23, 2017 3:04 pm

planteria wrote:i've seen BM mentioned elsewhere, yes..

what is the obvious reason you have in mind bobster?


Tbh I'm not sure. The only obvious thing I can think off is the closing of (not sure if its a loophole) funding accounts using DD as a method to get around getting the rewards.

When I had a savings account with ING I use DD to find the account to get the Halifax reward. As soon as Barclays took over the running of ING. Barclays mentioned that their be no change in the conditions. However When no DD came out from my account to Barclays saving account (this is the account that got transferred over from ING when Barclays took over), I spoke to Barclays advisors who mentioned DD are meant to be use from banks to a company such as gas, electricity and not within banks.

Maybe that's the reason tesco and the like are dropping the DD so that customers need to find alternative arrangements or something else happening over the horizon.

Alternatively you could do a DD to the personal pension as well as charity like someone on the forum mentioned.
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby pabenny » Thu Nov 23, 2017 3:24 pm

planteria wrote:..the costs to the charities of collecting DDs could be significant as a proportion of the donation. i'm open to anyone who knows more re. this.


The underlying costs of DD are pretty low and in many cases there are no bank fees at all - Co-op gives (small) businesses unlimited DD collections within the monthly account fee. Costs arise for the collecting organisation for admin in dealing with amendments, failed collections etc.

If you want to be sure that your donation isn't being swallowed up, opt out of all marketing or other communications from the charity that you donate to.
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby planteria » Thu Nov 23, 2017 8:48 pm

bobster007 wrote:
planteria wrote:i've seen BM mentioned elsewhere, yes..

what is the obvious reason you have in mind bobster?


Tbh I'm not sure. The only obvious thing I can think off is the closing of (not sure if its a loophole) funding accounts using DD as a method to get around getting the rewards..


oh ok. the reason i had in mind is simply that collecting DDs is more costly to the providers. the providers of the accounts which can be added to via DD are [usually, at least] not the same companies that are providing the rewards/bonuses/rates.
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby planteria » Thu Nov 23, 2017 8:53 pm

good tip re. ensuring that charities keep their costs down..

pabenny wrote:The underlying costs of DD are pretty low and in many cases there are no bank fees at all - Co-op gives (small) businesses unlimited DD collections within the monthly account fee. Costs arise for the collecting organisation for admin in dealing with amendments, failed collections etc.


i'm interested to understand more re. this pabenny. our credit union is suggesting that members make their Savings contributions by SO rather than DD, on account of 'reducing costs to the union' :problem:. does that not seem right to you?
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby planteria » Thu Nov 23, 2017 9:06 pm

bobster007 wrote:Alternatively you could do a DD to the personal pension...


that's an interesting idea. just checked and a small monthly contribution to a pension i make is by DD. i'm not sure if we are able to get pension companies to take more than one DD/month :think:.
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Re: Direct Debits for Account Bonuses/Rates/Incentives

Postby pabenny » Fri Nov 24, 2017 9:21 am

planteria wrote:... our credit union is suggesting that members make their Savings contributions by SO rather than DD, on account of 'reducing costs to the union' :problem:. does that not seem right to you?


It's not obvious to me why your credit union is preferring SO. My guess is that it's admin costs rather than bank fees:

With standing orders your bank sends funds to the recipient. No funds in your account, no payment. You have to make any changes yourself, for example if the amount varies. The only thing the recipient has to do is assign the monies received against your account.

For DD, the recipient has to submit a file through BACS of the funds to be claimed, which means the recipient has to manage the customer account data and amounts. They also have to deal with any rejected payments (no funds, mandate cancelled, etc) and resubmit accordingly.

AFAIK there should be no difference in the bank fees, but it will depend on the tariff agreed by the credit union.
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