This particular method of funding a Recurring Investment on the platform can be used by anyone preferring a Stop order over a debit order (see explanation at bottom of this article), but is particularly useful for minor accounts to give the parent / guardian the flexibility to edit / cancel the recurring investment at any time.
The alternative available to a parent / guardian is to setup what we call a 3rd party debit order (taking the funds by debit order from the parent / guardian account), but this involves sending us a signed form every single time a cancellation / change needs to be made.
To understand how this works, it's important to explain how a Recurring Investment works:
A Recurring Investment is a two-fold process, and it is very important that you understand this in order to carry out both elements of the process so that the platform can process your regular investments correctly. The two elements of the process are:
1. Moving funds from your bank account to the SatrixNOW account
2. Telling the SatrixNOW platform what to purchase with those funds.
In this article, we deal specifically with how to get those funds into the account after which you should read this detailed FAQ article which explains how to tell the platform what to buy with those funds.
Setting up a recurring payment / stop order on your bank account - through your bank
Using this method, you instruct your bank to transfer funds from your bank account to the SatrixNOW minor account at regular intervals you choose.
Most banks now offer their clients the facility to setup recurring payments / stop orders quickly and easily on their online banking platform.
This is a simple way to regularly transfer funds from your bank account to your SatrixNOW Investment / TFSA account where it can be used by a Recurring Investment, to be made out of Available Funds.
As the options for the specific day of the month on which Recurring Investments can run on SatrixNOW are the 1st, 3rd, 15th and 25th day of each month, recurring payments should be setup to transfer funds to your SatrixNOW account a minimum of 2 full working days (probably safer to choose 3 days) before the day you choose for the recurring investment to happen.
It is absolutely imperative to the success of a recurring payment (stop order) that the correct reference be used for that recurring payment so that we know which client and which account (Investment or TFSA) to allocate the funds to.
Please read this FAQ article for a detailed description of the reference you should use - What reference should I use?
If you opted for this method of transferring funds automatically on a regular basis to the minor account, you NOW need to instruct us what instrument/s you would like us to buy with those funds.
You can do this by setting up a Recurring Investment on the platform by following step B in this FAQ article.
Setting up a debit order on your account - through SatrixNOW
Due to the way debit orders work, they unfortunately can NOT be setup for Minor accounts on the platform in the same way as they can for persons of legal age.
If you want to setup a Recurring Investment on a minor account, and don't mind the manual paperwork and inflexibility of being unable to edit / cancel the recurring investment yourself on the platform, you can setup a 3rd party debit order as follows:
Using this method, you give SatrixNOW permission to transfer funds from your bank account to the platform at the regular intervals you choose.
For a minor account, this method involves the Authorised User of the minor account completing the following 2 steps:
1. Completing this Debit Order Authority form.
2. Emailing the signed form to email@example.com
If you opt for this method of Recurring Investment, you also need to stipulate (in the form above) what instruments you would like us to buy with those funds.
If you'd like to amend the Recurring investment after setup (eg. change the value or change the instruments being purchased with the funds), you'll need to email us the form again requesting the changes to be made.
By contrast, if you picked the Stop order method above, you would have the flexibility to change both:
a. The value of payment with your bank (probably yourself within your online banking app) and,
b. The value, date, frequency and instruments being bought by simply editing them on the Recurring Investments page on the platform.
STOP ORDER vs. DEBIT ORDER EXPLAINED
A stop order is an agreement between you and your bank, when you instruct the bank to make a series of future-dated repeat payments on your behalf. You can instruct the bank to cancel the stop order at any time. A debit order is an agreement between you and a third party (SatrixNOW in this case), which authorises the third party to take funds from your account. Your bank cannot cancel a debit order, because the agreement is not with the bank but with another company or individual.