Auto Draft is a facility that allows automatic deduction of payments from your bank account for recurring bills or subscriptions. It helps in making timely payments without manual intervention.
In-Depth Answer
Auto Draft is commonly used for utility bills, loan EMIs, insurance premiums, and subscription services. When you enable Auto Draft, the specified amount is automatically debited from your bank account on the due date. This ensures you never miss a payment and helps avoid late fees. In India, such services are regulated by the Reserve Bank of India (RBI) and often use the National Automated Clearing House (NACH) platform for secure transactions.
Quick Take
Auto Draft automatically deducts payments from your bank account for recurring bills or services.
Step-by-Step Process
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Register for Auto Draft
Contact your service provider or bank to register for Auto Draft. You may need to fill a mandate form or set up the facility online.
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Provide Bank Details
Submit your bank account details and authorise automatic debits for the specified amount and frequency.
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Confirmation and Activation
Once your bank verifies and approves the mandate, Auto Draft will be activated. You will receive a confirmation message.
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Monitor Transactions
Regularly check your bank statements to ensure correct deductions and maintain sufficient balance to avoid failed transactions.
Frequently Asked Questions
Final Thoughts
Auto Draft is a convenient way to manage recurring payments in India. Always keep track of your account balance and review your mandates regularly for hassle-free transactions.