Current Accounts Flashcards
What is a current account?
An account with a bank or building society designed
for frequent use, e.g. wages paid into, pay bills -
to withdraw cash regular deposits and withdrawals
What is an overdraft?
The ability to withdraw money that you do not have from a current account
What are the features of a current account?
▸ rate of interest paid on any positive balance
▸ rate of interest charged on a negative balance
▸ overdraft limit
▸ charges on unauthorised overdrafts
▸ additional incentives.
What type of current account is this?
Normal account offered to customers with a reasonable credit rating.
It includes standard features such as the ability to pay and withdraw money,
Standard
What type of current account is this?
This account offers additional features to a standard account, for example car and house insurance, credit card protection, breakdown cover and cash back on certain transactions.
Packaged, premium
What type of current account is this?
This account offers only limited features designed for those find it difficult to open a bank account due to poor credit ratings.
A basic account will not offer an overdraft and will not pay interest on positive balances.
Basic
What type of current account is this?
This account is designed specifically to meet the needs of learners.
Common features include an agreed overdraft limit and incentives to join the bank, for example free rail cards or cash.
Student
What are the advantages of a Standard Current Account?
- Unlimited transactions to be made
- Overdraft is available
- Able to use with mobile-banking
- Deposit + withdrawal of money at any location
- Bank statement
What are the disadvantages of a Standard Current Account?
- Limit on the amount of funds that can be withdrawn in a day - Going into overdraft can be dangerous- interest charge each day
- Rate of interest earned on available balance is low
What are the advantages of a Packaged, Premium Current Account?
- Don’t have to purchase insurance separately therefore saves extra money
- Extra rewards or perks in some cases
What are the disadvantages of a Packaged, Premium Current Account?
- Charges a monthly fee
- May not need all the benefits therefore it is not a great value for money
- Other accounts may offer better rewards
What are the advantages of a Basic Current Account?
- Pay Direct Debits, cash and cheques + receive salary or benefits into the account
- Easy way to manage – don’t check credit score rating
What are the disadvantages of a Basic Current Account?
- Overdraft facilities are not usually offered
- Restrictions on how much the holder can withdraw from cash machines in a single day
- Restrictions to automated and self-service facilities – online, telephone, and ATMs rather than over-the-counter services in branch
What are the advantages of a Student Current Account?
- Offer additional benefits including discounts in retail outlets, rail cards for trains, and money management facilities – dedicated mobile apps + cash transfer services
- Access larger overdrafts
What are the disadvantages of a Student Current Account?
- Fail to pay off their overdrafts once they begin to earn a regular monthly income – go into significant debt – high interest charge
