Chapter 8 - Commercial Banking

Question 1

Deposit account

Answer 1

Account for customers who want to save money. Interest is paid each year on the amount saved and it can be withdrawn or added to at any time

Question 2

Interest

Answer 2

Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of debt

Question 3

What is DIRT?

Answer 3

Deposit Interest Retention Tax -> tax payed on interest

Question 4

What are the advantages of a deposit account?

Answer 4

• Convenient way of saving money
• Receive interest
• Can withdraw money easily using ATMs
• Saving are safe

Question 5

What is a current account?

Answer 5

Useful for customers who want to pay bills and other expenses on a regular basis

Question 6

What are the advantages of a current account?

Answer 6

• Current account holders can use cheques and laser card instead of cash
• You can arrange to have your wages payed directly to your account
• Can apply for an overdraft
• Customers can use the internet and ATMs to access their account

Question 7

What must you provide when applying for a current account?

Answer 7

• Proof of address

* Proof of identity

Question 8

Commercial bank

Answer 8

Business that provides financial services to personal and business customers

Question 9

What can u do with an ATM card?

Answer 9

• Lodge money
• Withdraw money
• Transfer money
• Order statement
• Print a mini statement
• Pay a bill
• Check your balance
• Top up your mobile phone

Question 10

How do you use an ATM?

Answer 10

1. Insert ATM card into the hole in the wall machine
2. The ATM checks information stored in the cards magnetic strip
3. Key in your PIN
4. The ATM checks that the PIN matches the number stored in the magnetic strip
5. Choose the service required6. If you’re making a withdrawal select the amount of money
6. Remove the ATM card (and possibly money)
7. Remove the advice slip

Question 11

What can 24 hour banking be used for?

Answer 11

• Checking account balance
• Transferring money between your accounts
• Paying bills
• Applying for bank loan, bank overdraft or new credit card
• Ordering foreign currency

Question 12

How do you use a night safe?

Answer 12

1. Place cash in lodgement bag containing account number
2. Open safe with key
3. Drop lodgement bag down chute into bank’s vault