A direct debit enables another party (the initiator), once authorised by you, to take payments from your nominated bank account electronically.

The benefits

A direct debit can be for a regular fixed amount (e.g. rates or insurance payments) or for variable amounts (e.g. power bill payments).

The initiator of the payment lets you know in advance the amount and date the payment will occur.

It reduces your administration and removes the possibility of overlooking (missing) a payment.

Things to keep in mind

Most bank accounts can be used for direct debits but certain savings and deposit accounts may not allow withdrawals.

 The initiator does all of the work to process the payment but you need to ensure there will be sufficient funds in your account on the due date, otherwise the payment may be dishonoured.

You need to let the initiator know if your bank account details change (e.g. if you switch banks).


Establishing a direct debit generally requires your signed authorisation, although some initiators are permitted by their bank to accept online or phone authorisations.

You can cancel a direct debit authorisation at any time by contacting your bank and the initiator.