personal finance

Question 1

what are financial institutions

Answer 1

organisations that offer financial services to individuals and/or businesses.

Question 2

what are the 9 financial institutions

Answer 2

bank of england
banks
credit union
payday loan
pawnbrokers
pension companies
insurance companies
national savings and investments
building societies

Question 3

bank of england definition

Answer 3

central bank of uk - responsible for maintaining monetary and financial stability in the country

Question 4

bank of england advantages

Answer 4

ensures monetary stability
regulated financial system
promotes economic growth

Question 5

bank of england disadvantages

Answer 5

keeps interest rates high for too long

Question 6

banks definition

Answer 6

provides various services e.g. accepting deposits, lending money

Question 7

bank advantages

Answer 7

safekeeping on funds
access to credit
convenient financial services
money protected against fraud or error

Question 8

bank disadvantages

Answer 8

when u place money in a bank u cannot invest the money

Question 9

building societies definition

Answer 9

provides banking and mortgage services to its members

Question 10

building societies advantages

Answer 10

competitive mortgage rates
personalised customer service
opportunity to become a member and have a say in societies operations

Question 11

building societies disadvantages

Answer 11

limited investment opportunities
inflexible - may have penalties for early withdrawal

Question 12

credit union’s definition

Answer 12

financial cooperatives that are owned and operated by their members, offer similar services to banks

Question 13

benefits of credit union

Answer 13

lower interest rates on loans
higher interest rates of savings accounts
personalised customer service
sense of community and member ownership

Question 14

drawbacks of credit unions

Answer 14

limited branch and ATM services compared to larger banks
may have fewer financial resources available

Question 15

national savings and investments definition

Answer 15

financial institution in the uk that offers a range of savings and invest,ent products backed by the uk gment

Question 16

insurance companies

Answer 16

companies that provide insurance policies to individuals or organisations to protect against potential financial loss

Question 17

national savings and investments benefits

Answer 17

gment backing
secure
competitive interest rates
wide range of saving and investment products to chose from

Question 18

national savings and investments drawback

Answer 18

may charge penalties if u cash out early on some investment products
rates are variable
often required to give notice on withdrawals

Question 19

insurance companies advantages

Answer 19

offer a wide range of services and cover to suit the individual
provide protection against unexpected loss or financial expenses

Question 20

insurance companies drawbacks

Answer 20

profit making organisation - premiums will be charge to ensure shareholders needs are met
premiums are assessed on the degree of risk which may be seen to penalise some individuals or groups in society too harshly

Question 21

pension companies

Answer 21

companies that offer retirement plans and manage investments for individuals to help them save for their future

Question 22

pensions companies benefits

Answer 22

experts are employed to make investment decisions
provide a structure to help plan for financial security after retirement

Question 23

pension companies drawbacks

Answer 23

poor investment decisions made by pension company may result in a disappointing return on investments
money already invested in a pension company cannot be released prior to the dates agreed in the policy

Question 24

pawnbrokers

Answer 24

businesses that provide short term loans to individuals by accepting personal items as collateral

Question 25

benefits pawnbrokers

Answer 25

a quick way or acquiring cash needed for a short period of time
interest is not charged

Question 26

drawbacks pawnbrokers

Answer 26

if the item is not brought back in a specified time period, the pawnbroker will sell it on
the amount given for an asset is often significantly lower than the actual worth

Question 27

payday loan

Answer 27

a type of short term loan that is typically repaid with high interest rates on the borrowers next payday

Question 28

payday loan benefits

Answer 28

quick way to acquire cash
useful to meet emergency cash shortages

Question 29

payday loan drawbacks

Answer 29

only available for relatively small amounts of money
high interest rates