If you have to pay an account regularly, two options are open to you at your bank: the stop order and the debit order.
It is important to understand what these are and what they cost. You have greater control over money that leaves your bank account via a stop order rather than a debit order, but most banks charge you more for stop orders than for debit orders.
When you sign a debit order you are virtually giving somebody carte blanche to withdraw money from your account and the only way to permanently cancel a debit order is to close your account.
If you are a customer at First National Bank, you pay R2,85 more for the safer option of using a stop order off your cheque account.
Standard Bank charges less for stop orders than for debit orders, but only for amounts over R300. A stop order costs R4,50 for any amount, whereas a debit order is charged at R4,35 for R250, and R11,00 for R1 000.
At Absa you have a choice of paying for all your debit orders off a cheque account, either at a fixed rate of R3 each, or the sliding scale. If the amount is over R100 you are better off choosing the fixed fee.
Jack Trevena, assistant general manager, retail products, at Nedcor, says the reason that stop orders are more expensive is that there is more work involved for the bank in processing your stop order than in your debit order.
A stop order is usually created by you at the inquiries counter of your bank branch.
A debit order, on the other hand, is an electronic instruction to your bank from the person or company being paid by you. The bank's only task is to see whether you have the funds in your account to cover the debit order.
Banks charges on stop and debit orders also differ depending on whether you operate a cheque or transmission account.
A transmission account is similar to a cheque account except that you are not issued with a chequebook.
CHEQUE ACCOUNTS
Comparing debit order costs based on an amount of R250 and R1 000, the most expensive bank is Nedbank, which charges R4,58 and R13,61 respectively. The cheapest is Mercantile Bank, which charges R2,30 and R8,60.
When comparing stop order costs, a different picture emerges. In this instance, First National Bank is the most expensive, whacking you with a flat rate of R6,27. Nedbank and Permanent Bank are the cheapest, with a flat fee of R2,28.
Remember that the fees in the table apply to basic cheque account packages. Also, if you keep a certain minimum balance in your account, you may qualify for free banking on most or all of your fees.
TRANSMISSION ACCOUNTS
Both debit and stop orders on transmission accounts at the banks surveyed by Personal Finance are charged at a flat rate, so the amount of money involved is not relevant.
On debit orders, Absa and Standard Bank emerge as the most expensive, charging you R3 for a debit order off a transmission account.
When comparing the fee for stop orders, Permanent Bank charges the most, billing you R4,56 every time a stop order goes off your account.
Pick 'n Pay Financial Services has the cheapest fee for both debit and stop orders at R2. And if you maintain a balance of R2000, these transactions are free of charge.