Financial Services for individuals and households Flashcards
What is a current account?
A current account allows you to lodge and withdraw money at any time. This account is for day to day transactions.
Define Lodge and Withdraw?
Lodge:
Put money into a bank account.
Withdraw:
Take money out of a bank account.
Name 8 examples of current account services?
ATM Pay Path Bank Draft Cheque Debit Card Credit Transfer Over-Draft Bank Statement
What is an ATM? What does ATM stand for and how do you withdraw money from someone’s account?
ATM’s provide a variety of services related to current accounts. Automated Teller Machine. To withdraw money you need the correct card and the PIN (Personal identification number) must be entered.
What five services does an ATM provide?
Check your balance Pay Bills Get Credit Withdraw Cash Order Bank Statement
What is the difference between Debit Card and Credit Card? What are the advantages of each?
Debit Card-Allows money to be transfered electronically from the customer’s bank account to the retailer’s bank account.
Advantages: Safe and Convenient
Credit Card-Allows money to be borrowed from the credit card company and sent electronically into the retailers bank account for large purchases.
Advabtages: Buy now, pay later.
What is a Cheque?
A written instruction to a bank to pay a stated sum of money from your bank account to a named person.
What happens if there is not enough money in the account to pay the cheque?
Then the Cheque bounces and the payment cannot be made, both people involved are charged.
What is Credit Transfer?
Allows you to transfer money from your bank account to another person’s bank account.
What is Paypath?
Electronic way of transferring wages from an employer’s bank account to an employee’s bank account.
What is the advantage of PayPath for Employer and Employee?
Advantages for Employer: Safer for Employer who no longer needs to handle large amounts of cash on payday.
Advantages for Employee’s: Saves employee time as the money is already in the bank account.
What is an Overdraft?
Permission to withdraw more money than you have in your account.
What are the advantages and Disadvantages of Overdraft?
Advantages:
Convenient to pay for household items in the short term.
Disadvantages:
High Interest is charged.
What is the difference between a Standing Order and a Direct Debit? Give exmaples of both.
A Standing Order is a regular fixed amount of money sent to a stated persons bank account on a specific date snd time every month. E.g. Mortgage
A direct Debit is a variable amount of money sent from your bank account to a stated persons bank account anytime. Pays irregular expenditure where the amount changes every month. E.g. ESB, Vodafone.
What do you need to prove before opening a current account?
To open a current account you must have: Proof of Identity Proof of Address (Bill) Employment Status Sample Signature
