Personal finance

Question 1

give 3 ways to pay

Answer 1

1. cash
2. debit card
3. cheque

Question 2

Different levels of current accounts

Answer 2

1. standard account
2. Packaged premium account
3. Student account
4. Basic account

Question 3

Different types of borrowing

Answer 3

1. Overdraft
2. Personal loan
3. Hire purchase
4. Mortgage
5. Credit card
6. Payday loan

Question 4

What is an overdraft

Answer 4

Short term loan that is pre-arranged with with the bank

Question 5

What is a pay day loan

Answer 5

short term loan with added interest

Question 6

Benefits of having a standard account

Answer 6

• no banking fees
• overdraft facilities
• cheque book and contactless bank card

Question 7

Benefits of packaged, premium account

Answer 7

• travel insurance
• interest on credit balances
• special interest rates on overdraft

Question 8

What are premium bonds

Answer 8

don’t pay interest, savers have the chance to win tax-free cash prize every month

Question 9

What is a share

Answer 9

shares give investors part ownership of a company. in return they get payments or dividends per share based on profits

Question 10

Individual savings account

Answer 10

• allows you to save without paying tax

- limit to how much you can save

Question 11

Deposit and savings accounts

Answer 11

• allows you instant access to savings

- variable amount of interest which is taxable

Question 12

Name the six types of insurance

Answer 12

Car insurance
pet insurance
home insurance
travel insurance
health insurance 
life insurance

Question 13

list features to life insurance

Answer 13

+ pays out a sum of money in the event of death
+ pay out may be more than what insurance costs
- Pre-existing medical conditions may not be covered

Question 14

List features to travel insurance

Answer 14

+ provides cover for delays and cancellations
+ Cover of personal possessions on the trip
- pay outs may not cover full amount

Question 15

Bank of England

Answer 15

• regulates and supervises banks, building societies, insurance companies
• responsible for maintaining the UK’s monetary and financial stability
• sets interest rates
• issues legal tender

Question 16

Credit Unions

Answer 16

• Financial cooperatives owned and run by their members
• Not for profit organisations
• offers saving accounts , current accounts and loans

Question 17

Building societies

Answer 17

• owned by their members
• provide financial services e.g. saving accounts
• can offer better interest rates than banks

Question 18

Banks

Answer 18

• owned by their shareholders
• offers current and savings accounts, loans
• reliable, secure and private
• may charge for certain accounts and services