6 - Types Of Financial Institutions Flashcards
What are 2 advantages of the Bank of England?
They set interest rates to keep the economy stable
Can lend money to banks
What are 2 disadvantages of the Bank of England?
Not for the public to use
Can raise interest rates, making borrowing expensive
What are 2 advantages of a bank?
Offers different services and accounts
Secure place to store cash
What are 2 disadvantages of a bank?
Savings are only protected until £85k
Costs may be higher to meet shareholder needs
What are 2 advantages of a building society?
Offers different services
Costs can be kept down with high interest
What are 2 disadvantages of a building society?
Savings are only protected until £85k
May lack the drive of a commercial bank
What are 2 advantages of a credit union?
Costs can be kept down with high interest
Additional benefits for the community
What are 2 disadvantages of a credit union?
Restricted online access
Fewer ATMs support credit unions
What are 2 advantages of National Savings and Investments?
Offers lots of options
100% secure as it’s government-backed
What are 2 disadvantages of National Savings and Investments?
Variable rates
Required to give notice on withdrawals
What are 2 advantages of an insurance company?
Offers lots of services and cover
Protection against unexpected expenses
What are 2 disadvantages of an insurance company?
Premiums charged to meet shareholder needs
Premiums are assessed based on risk
What are 2 advantages of a pension company?
Experts make investment decisions
Plan structure helps make financial security for retirement
What are 2 disadvantages of a pension company?
Poor decisions can lead to disappointing returns in investment
Money invested can’t be released prior to agreed terms
What are 2 advantages of a pawnbroker?
Quick way to acquire cash
No interest
