2Y: Financial Services for Individuals Flashcards
What is a financial institution?
A financial instituition provides financial services for their customers including:
- storing their money
- managing payments
- & providing loans
Name the 4 types of financial institutions?
- Commercial Banks
- The Post Office - An Post
- Credit Unions
- Building Societies
Name the services offered by Financial Institutions? (7)
- Current accounts
- Deposit Accounts
- Loans
- Bill Payment & Money Transfer
- Credit Cards
- Internet & Telephone Banking
- Foreign Exchange Services
What are the differences between Deposit Accounts and Current Accounts?
Deposit Account:
- Used to save money.
- Savings earn interest.
- Interest subject to DIRT.
Current Account:
- Used for daily banking and bill payment.
- No interest earned.
- ATM and Debit cards.
- Chequebook.
- Overdraft facility.
- Make direct payments to other accouns by DD, SO, CT.
- Allows for receipt of wages,
What do you need to open a current account?
- Proof of identity - passport or driving licence
- Proof of address - recent utility bill…Electric ireland, Eir or Gas bill.
- Your Personal Public Service Number - PPSN
What is a debit card?
- Issued by banks to people who have Current Account
- Money is transferred from the cardholders current account to the retailers account.
- Debit cards can be used to withdraw cash from an ATM.
What is a credit card?
- Cardholder can purchase goods on credit up to a certain limit.
- 28 days to pay the balance in full.
- If balance is not paid, interest is charged on the amount owed.
- Credi cards canalso be used o withdraw cash from ATM/s.
- Examples: Visa, Mastercard.
What is a charge card?
- Same as credit card,
- Except the amount owed must be paid in full when statement is received.
- Examples: American Express, Diners Club.
What is a smart card?
- Cardholder preloads the card with an amount of money.
- Pays for goods using the same way as a debit card.
- Prevents over spending.
- Examples: Swirl, Neteller, O2 Money Card
What other methods are there for paying for goods and services? (4)
- Standing Order
- Direct Debit
- Credit Transfer
- PayPath
What is a Standing Order?
An instruction from the account holder to the bank to pay a fixed sum of money on a regular basis to a named person. Examples: Mortgage payments, Life assurance payments, Term Loan Payments…etc.
What is a Direct Debit?
Permission is given to a business to request payments from your bank acccount at regular intervals which may vary. Examples: Utility Bills - Phone, Electricity, Gas.
What is a Credit Transfer?
A credit transfer allows you to transfer money from your back account to another persons bank account. Can be done using internet banking facility.
What is PayPath?
Paypath is an electronic means of transferring an employees wages from the employers bank account to an employees bank account. Safe methon of payment with no risk of carrying cash or cheques.
What is a cheque?
A written instruction to a bank to pay a stated sum of money to a named person.
