3 Oct - 4 min read
If you have ever had the annoyance of a hefty fee or
increase in interest rate simply because you missed a deadline on your loan
payment – you might consider making a Standing
Standing instructions are a way of making an automatic
payment of a fixed amount to a loan, bill, or credit card at the same time
every week or month. It can be made from your savings or checking account and
is most commonly used to make payments to a mortgage, car loan, or to pay
Almost anything a bank does for you that offers any kind of
convenience will come at a cost.
Depending on your bank, each
transaction made will cost you RM2 in fees*. This means that if you use
Standing Instructions to pay 3 loans and 2 credit cards, you will pay 5 transaction fees at a cost of about RM10
Tip: If your
account has insufficient funds to make a payment at the time you set the
transfer, you may be charged between RM2-5 in fees for every unsuccessful
Standing instructions aren’t for everyone – especially if
you want to avoid paying fees. If the following applies to you, then a standing
instruction might be the a good option to manage your money:.
Standing instructions are especially good if you are busy and have little time to spend
bothering about bills and loans. Nonetheless, it’s not altogether cheap. RM10
paid each month is RM120 a year which could be better spent elsewhere.
If you feel uncomfortable setting up automatic payments on
the off-chance you do forget a bill, these are some other ways you could try to
avoid the problem.
There is no doubt that setting up a Standing Instruction
will ensure all your payments are made at the time they are due every month in
the amount required. Whilst such a convenience might be welcome, consider the
extra cost of using an automated payment system.
*Fees may vary from bank to bank. Majority of banks in Malaysia have set standing instruction fees at RM2.
Image source: guardian.co.uk
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