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JC Business > Banking and Money > Flashcards

Banking and Money Flashcards

0
Q

Name some functions of money

A

Puts a value on objects
A means of exchange
A store of wealth
It gives us a credit system

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1
Q

What is money

A

Money is anything that is mostly excepted in exchange for goods and services

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2
Q

What do commercial banks do

A 
They operate:
Current accounts
Deposit accounts
ATMs 
Provide loans
Night safes
24 hour banking service through the Internet
Foreign currency exchange
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3
Q

What is a current account

A

An account that we use for day today expenses,

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4
Q

Name some services available with a current account

A 
ATMs 
Standing orders
Direct debit 
Cheque book
Overdrafts
Pay path
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5
Q

Is there a fee for current account services

A

Yes

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6
Q

What is an overdraft

A

When the bank let you to go into minus money. Give example. You pay interest on an overdraft

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7
Q

What does ATM stand for

A

Automated teller machine

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8
Q

Name some services an ATM provides

A

Check your balance
Take out money from your bank account
Top up your phone

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9
Q

What is an ATM operated with

A

A PIN number

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10
Q

What does a PIN number stand for

A

Personal identification number

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11
Q

What is pay path

A

How an employer pays an employee wages electronically directly into their bank account which makes it safer more convenient and faster

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12
Q

What is a standing order

A

Way to pay bills. You pay a fixed amount on a fixed date, when you tell, the bank to pay an amount of money to the 3rd party every week/month etc…
Give example

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13
Q

What is a direct debit

A

Way to pay bills but amount of money varies. You allow a third party to access your bank account, give example

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14
Q

What is the difference between DD and SO

A

SO is a fixed amount and DD is a varied amount.

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15
Q

What is barter

A

Is the swapping of one good for another

16
Q

Explain a cheque

A

This is a written instruction to a bank to pay a stated sum of money to a stated person or to the bearer of the cheque

17
Q

What is a bank draft

A

This is when in a cheque the bank is both the drawer and the drawee

18
Q

Explain legal tender

A

Is the form of money that a creditor is legally obliged to take up in payment of debt

19
Q

What is a credit transfer

A

This is a system where people can transfer money from their bank account to another persons bank account

20
Q

In terms of cheques who is the drawer drawee and payee

A

Drawer is the person who makes out cheque
The drawee is the drawers bank
The payee is the person to whom the cheque is payable

21
Q

Explain stale check

A

A cheque that has not been crashed or lodged within six months of the date written on it

22
Q

Name three places to invest money

A

Deposit account
Shares
Property

23
Q

Why do people save money

A

To purchase an expensive item
To earn interest
For precation
To provide for children’s education

24
Q

What is DIRT

A

Deposit Interest Retention Tax

A Tax that reduces the amount of interest earned on saving money

25
Q

What should a person consider before saving or investing

A

Interest rates
Tax, subject to DIRT
Convience- can you access money from ATM.

26
Q

Factors to consider before borrowing

A

How long do the repayments last
How much is the interest on the loan/mortgage
Can I afford the repayments or do I have other financial commitments
Where can I get the best loan, mortgage

27
Q

Explain mortgage

A

A long term loan used for purchasing a house. This loan requires collateral such as deeds to the house. Usually repayed over 20/30 years

28
Q

Three requirements to open a bank account

A

Proof of address ex. Bill
Proof of identity ex. Passport
PPS number
Source of income

29
Q

Give two differences between a current and deposit account

A

Current account may have an overdraft facility where more money than in account can be withdrawn. Deposit account only balance can be withdrawn
Deposit accounts gain interest. Not offered for current account mostly but sometimes is with a minimum amount of money in account

30
Q

How are pension funds transferred to bank account

A

Electric fund transfer- pension is put directly into bank account by pension provider

31
Q

Methods of withdrawing money for a current account

A 
Withdrawal slip
Cash back
ATM
Standing order
Direct debit
32
Q

Explain collateral

A

An item of value kept given to a financial institution from a borrower as a type of security on a loan. This can be sold or kept by the institution if loan is not repaid in full eg. Deeds to a house

JC Business (24 decks)

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