A3

Question 1

What is a current account?

Answer 1

An account with a bank or a building society designed for frequent use

Question 2

When is a current account used?

Answer 2

Regular deposits

Withdrawals

Question 3

What is a overdraft?

Answer 3

It is the ability to withdraw money that you do not have for a current account.

Question 4

What is an authorised overdraft?

Answer 4

It is when the bank has given you permission to go overdrawn up to a certain amount

Question 5

What is an unauthorised overdraft?

Answer 5

It is when the bank has not given you permission to go overdrawn

Question 6

What are the 4 types of current account?

Answer 6

Standard
Premium/packaged
Basic
Student

Question 7

What are the advantages of a standard current account?

Answer 7

• No charges/fees paid on credit balances
• Features include : internet banking, cheque book, debit card and overdraft facilities
  Convenient for receiving wage payments and making regular payments

Question 8

What are the disadvantages of a standard current account?

Answer 8

• High charges for using the overdraft facility

- No additional perks

Question 9

What are the advantages of a premium current account?

Answer 9

• No charges/fees paid on credit balances
• Features include : internet banking, cheque book, debit card and overdraft facilities
• Convenient for receiving wage payments and making regular payments
• Includes additional perks

Question 10

What are the disadvantages of a premium current account?

Answer 10

• An additional monthly charge is applied to these accounts

- The package on offer may not meet the needs of the account holder

Question 11

What are the advantages of a basic current account?

Answer 11

• The account is offered to people with a low credit score
• Features include : a cash card for ATMs
• This account is suitable for receiving wage payments and making regular payments

Question 12

What are the disadvantages of a basic current account?

Answer 12

• There are limited facilities offered such as no debit card or overdraft facilities
• These accounts will lock if they don’t have a positive bank balance

Question 13

What are the advantages of a student current account?

Answer 13

• Course fees and student loans can be managed easily through internet banking
• The perks are designed to meet the needs of learners such as discounts on travel

Question 14

What are the disadvantages of a student current account?

Answer 14

• Overdrafts can encourage overspending
• Banks charges/fees for overdrafts are high
• Limited facilities offered

Question 15

What is an ATM?

Answer 15

These are machines that dispense money, tell you how much your balance is in your account and allows you to change passwords

Question 16

What is a direct debit?

Answer 16

A direct debit is giving a company permission to take money out of your account.

Question 17

What is a standing order?

Answer 17

A standing order is telling the bank to take money out of your account to pay someone else.

Question 18

What are bank charges?

Answer 18

These are charges banks make for administering peoples account and charges for overdrafts.

Question 19

What is internet banking?

Answer 19

The ability to ‘bank’ online