The difference between a debit order and a stop order is not obvious to some people. Many use these terms interchangeably without fully understanding their meaning. After all it is money that is deducted from their account. However, that is where the similarities end.

According to Ryan Prozesky, CEO for consumer core banking at FNB, these two should not be confused.

He says that debit orders are a convenient way to give a company or third-party permission to deduct an amount on a regular basis from an account.

Many people use the debit order service to pay for life insurance, monthly gym membership fees, and investments like retirement annuities.

“With a debit order, permission is given to the collector to deduct the funds from a customer’s account on a regular basis,” Prozesky explained.

On the other hand, a stop order is used by an account holder to make regular payments to a company or person from their bank account.

“The only difference between a stop order and a normal payment is that you use a stop order for regular ongoing monthly payments,” says Prozesky.

“This is ideal to avoid having to make a payment every month,” he adds.

With a stop order, the payment will be deducted automatically on a specific date every month for the amount indicated.

According to Prozesky, FNB customers can set up a stop order on their account in a branch, through online banking or FNB Banking. This gives customers control over stopping or cancelling the payment when they please.

“With a scheduled payment or stop order, the customer instructs their bank to make payment on a regular basis,” explains Prozesky.

Some banks normally charge a monthly fee for debit and stop orders.  However, Prozesky says FNB does not charge customers for setting up a stop order payment through digital channels.

The bank only charges for debit orders depending on the type of account that the customer uses.

Benefits of using a debit order

  1. You don’t have to visit the bank to make payments. It’s convenient.
  2. You don’t miss payments. They are made on time.
  3. Your payment history is recorded.
  4. You can reverse the payments.

Disadvantages of using a debit order

  1. You can be charged a hefty fee if the debit order bounces.
  2. A debit order can be deducted before the set date.
  3. A debit order can be accidentally deducted multiple times.

Benefits of using a stop order

  1. You don’t have to make frequent visits to the bank.
  2. You choose the amount that must be deducted.
  3. You can cancel the stop order whenever you want.

Disadvantages of a stop order

  1. You cannot reverse the payment once it goes through.
  2. Since you have control over the stop order, you can fall behind with your payments.