Run out of regular payments required for free cash? Here are few easy direct debits that’ll help.
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How many direct debits could you need?
I’m a fan of having multiple current accounts. Some of this is practical. What happens if the app goes down and you can’t access your cash? But the main reason I have so many (23 at the last count) is to nab free switching cash and monthly rewards.
These accounts bring in hundreds of pounds extra every year, and are relatively easy to maintain. In fact once I’ve set them up I hardly have to touch them.
However, the downside is that the more of these accounts you have, the more direct debits you need. And even if you’ve got all the obvious payments, you might need some more. Recently we’ve seen some switch offers require three active direct debits on the old account, so even if you have one or two already, you might need another.
What is an “active” direct debit?
Quite a few switching offers and perks require an active direct debit to leave the account. Technically this could include any payment that has been taken in the last year.
However for the most part these direct debits have to come out every month to qualify – ruling out annual or quarterly payments.
You might also find when switching that the new bank wants the active direct debit to have already been paid from the old account. If you don’t have these on the account you want to switch you’ll need to set them up and have payments made before the switch date.
Finding new direct debits
The most obvious direct debits we have, such as our bills, will be eaten up quickly so I imagine you’ll need a few extras. Here’s a list that should sort you out.
Bill direct debits
These are the direct debits you’ll already have so you might just need to move them around to different accounts.
The first list here will most likely be best placed on the Santander Edge account as you’ll earn cashback on them – though check your supplier is included.
- Energy bill
- Council Tax
- Broadband/Phone bill
- Pay TV bill (Sky, Virgin etc if different to broadband)
- Mobile phone bill (there could be multiple ones here)
- Water bill
The following bills won’t earn cashback via Santander (though they could via Biscuit), so you could move the direct debits to one of the other reward accounts.
- TV Licence
- Some insurances (check it’s not cheaper to pay annually)
- Vehicle tax (however if you pay monthly there’s a 5% surcharge)
With other memberships and subscriptions check the payment actually is via direct debits – some might use standing orders or “Continuous Payment Authorities” – where they have your long card number. This is how Spotify and Netflix charge you so they won’t count (though I’ve a workaround below).
The best bank switch bonuses
Check out our list of all the bank switch offers you can get when opening a new current account
Credit card direct debits
It’s always a good idea to set a direct debit to clear your credit card every month, or at least make the minimum repayment. If you’ve got more than one credit card that also means more than one direct debit.
But remember they need to be active every month… so you need to use the credit card every month.
If you don’t use a card very often you could put a set regular payment on there, such as paying for Netflix, to ensure this happens. And if you have more than one of these services and more than one credit card, you could get two or three regular direct debits this way.
Services this could work for include:
- Streaming services (eg Apple Music, Netflix & Spotify)
- Memberships (eg English Heritage, gym)
- Subscriptions (eg food boxes, beer clubs magazines)
It can also work for some Buy Now, Pay Later services, such as Klarna. But you must make sure that you are paying the item off with a connected current account and not a linked bank card. Also be careful of the risks that can come with spending via BNPL.
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PayPal direct debits
When you pay for something using PayPal, it will usually use a direct debit to take the money from your connected current account (make sure you connect your current account, not your debit card). But for this to count for your current account benefit it probably needs to happen every month.
But there’s a simple workaround here. When you add money to your PayPal account you have options of how to do this, and the most simple way is via a direct debit from your current account. To do this via the app:
- Select “add money”
- type in how much you want to move
- select the connected current account with the direct debit set up
It takes up to five days for the money to move.
Alternatively, if you want to automate it, you can use PayPal to pay for a regular service that doesn’t allow direct debits. This is how I pay for my Spotify, meaning every month I have a PayPal direct debit come out of my account.
Sadly this counts as a single direct debit from PayPal, no matter how many services you pay for this way.
Also, a word of warning. a few readers have told me they’ve had issues with these direct debits transferring. This has worked for me on a number of occasions, but it might be worth trying the other options first to be safe.
Currensea card direct debit
Similar to paying with PayPal, if you use your Currensea debit card to make a transaction, it’ll use a direct debit to pull the cash through from your linked bank account.
There is a free version of Currensea, and it’s a handy back up to have when spending abroad. However there are alternatives I’d use before this for holiday spending.
The Hilton Honors debit card works in the same way as it’s run by Currensea. However these cards have annual fees so they’re only worth it if you’re going to use the card regularly to earn Hilton points.
Charity donation direct debits
It might be worth changing how you donate (if you do). Though it’s easy to do this via payroll giving, you might want to switch to a DD to meet the criteria for an account.
If you’ve used all the above and still need more, then you can set up extra small direct debits to most charities. Check the requirements for the current account perk as some require at least £2 on each direct debit.
However, if you’re only setting these up to switch, and once you have switching cash plan to stop the DD, please consider one of the other options on this page. That’s because it’ll cost the charity to set up the initial payment, which won’t be worth it for just a few quid.
Savings accounts direct debits
Savings accounts are great extra direct debits as you can send a small set amount over without having to pay for a new service.
You’ll also be able to transfer the money back to your current account – just check there aren’t penalties or restrictions to do this.
Sadly the Post Office stopped allowing payments in this way to their savings accounts, but there are other options. I think the best ones, if you’re happy to use apps, are via Plum and Moneybox.
You could also consider Park Christmas Savings, though bear in mind this works very differently to normal savings options.
There aren’t many that allow DDs but I’ve found the following:
Moneybox savings or investing accounts (weekly DD) (£2 minimum and only one withdrawal a month) - Plum (might not transfer during a switch)
- Some credit unions
Park Christmas Saver (not FSCS protected, and can only cash out for gift vouchers in September to November)
Investing direct debits
It’s worth checking investment platforms too, with Vanguard a popular option. However, they may have quite high minimum amounts that can be added each month, or at least when you first open the account.
Plus bear in mind when you add money here there’s a chance in the short term that the amount transferred loses it’s value.
But if you are investing for the long term then this could well just be the cash you’re adding on a regular basis anyway.
Thanks to Chris who suggested many of these in the comments:
- AJ Bell
- Invest Engine
- JP Morgan Personal Investing
- Moneybox
- Moneyfarm
- Vanguard
- Wealthify
Other direct debits
This final list contains low cost services or products you can pay for via direct debit but might not be part of your normal spending but you’ll get something in return.
So though you’re shelling out some cash, it might be worthwhile doing this for a month or two in return for that switching bonus if you’ve exhausted all the other options.
- The Guardian (min £2 a month)
- National Lottery (from £1 per game, so around £4 a month – can take 4 weeks to set up)
- Health Lottery (from £1 per game, so around £4 a month)
Postcode Lottery (£12 a month) - 50p Direct Debits (min 50p a month – no service in return but can be processed fast)
- Tiny Direct Debits (min £1 a month – no service in return but can be processed fast)
