Meaning
A mandate payment is a pre-approved instruction that allows money to be automatically deducted from your account on a fixed schedule. It is widely used for recurring bills and subscriptions.
Examples
- Monthly EMI deductions.
- Electricity bill payments.
- OTT or newspaper subscriptions.
Importance
- Saves time with auto-debit.
- Avoids late payment penalties.
- Useful for both individuals and businesses.
Use Case
If you set a mandate for your insurance premium, the amount is auto-deducted every month without reminders.
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