You can use a Pre-Authorized Debit (PAD) in two ways:
- To pay bills automatically from your bank account. All you have to do is make sure there’s enough money in your account to cover the bills.
- To automatically build up savings. You simply ask your bank to take a set amount of money from your pay or your account each month for saving or investing. Companies may call this type of PAD a pre-authorized payment, an automatic deduction, or a pre-authorized contribution.
Examples: You can arrange to deposit money directly into your Registered Retirement Savings Plan (RRSP). You can also buy investments like Canada Savings Bonds (CSBs), Guaranteed Investment Certificates (GICs), or mutual funds automatically through a PAD.
A PAD might not be right for everyone. Find out:
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.