Financial Institutions Flashcards
What are the features of the Bank of England?
-Regulates Financial institutions
-Responsible for maintaining the UK’s monetary and financial stability
-Sets interest rates (For commercial banks)
-Issues legal tender
What are the features of Banks?
-Owned by shareholders.
-Reliable, secure and private.
-Savings are secured up to an upper limit of £85,000.
What are the features of Building Societies?
-Owned by their members
-Provide financial services e.g. savings accounts, mortgages.
-Can offer better interest rates and savings than banks.
-Fewer branches leading to poorer access.
What are the features of Credit Unions?
-Owned and run by their members.
-Not for profit organisations.
-Offers saving accounts, current accounts and loans.
What are the features of National savings and Investments?
-Sells premium bonds and ISAs
-Money invested is used to finance government activity.
-Savings and Investments are secure.
-Poor interest rate, no interest payments on premium bonds
What are the features of Insurance companies?
-Offers policies chich compensate against personal injury, loss or damage to property.
-Also offer life insurance and pension plans that provide financial security.
What are the features of Pension companies?
-Funds locked into saving schemes in preparation for retirement.
-Projected income is based on figures that may change over time.
What are the features of Pawnbrokers?
-Businesses that loan money against the value of a person’s assets.
-Interest is charged on loans for the period during which the money is borrowed.
-Pawned items not bought back within a certain time may be sold by the pawnbroker to recover the debt.
-Short term cost is high and their is risk of losing the item.
What are the features of Payday loan companies?
-Businesses that offer short term loans to people requiring cash between paydays.
-Immediate cash available even for those with poor credit history.
-Very expensive as interest rates are high and easy to get into debt.
