Financial Institutuons

Question 1

Bank of England

Answer 1

Uk’s central bank, responsible for maintaining a healthy level of financial stability.
advantages: lends to banks, disad: not a bank for members of the general public

Question 2

Banks

Answer 2

A bank is an organisation that handles financial transactions and stores money on behalf of its customers.
advantages: offer a range of services and account types, disadvantages: savings only protected up to £75,000

Question 3

Building Societies

Answer 3

organisations that handle financial transactions and store money on behalf of their members.
do not have shareholders on stock exchange.
provides a secure place to store money,pay interest on most accounts but only protected up to 75,000

Question 4

Credit Union

Answer 4

these are not for profit organisations that handle financial transactions and store money on behalf of their members.
oftent offer additional benefits and savings are only protected up to 75,000

Question 5

National savings and investment

Answer 5

this is a government backed organisation that offers a secure saving option. 100% security but rates are variable and not as easy to access

Question 6

insurance companies

Answer 6

these are businesses that protect against loss of return in a premium. these are profit making organisations.
regular payments make planning easy and premiums are assessed on the estimate degree of risk

Question 7

pension companies

Answer 7

businesses that sell policies to individuals, either privately or through employers
provides a structure to help plan financial security after retirement but poor investment decisions may result in disappointment

Question 8

pawnbrokers

Answer 8

businesses who loan money against the security of an asset

interest is not charged but the amount given is often lower than its worth

Question 9

payday loans

Answer 9

organisations that offer a short term source of finance used to bridge the gap
It is quick but interest tends to be high