Personal Finance Key Terms Flashcards
Cash
Notes and coins in a wide range of denominations.
Debit card
Issued by banks for goods and services being deducted directly from a current account.
Credit card
Issued by financial institutions allowing customers to delay payments for goods and services.
Cheque
A written order to a bank to make a specific payment for a specific amount of money from one person’s account to another account.
Electronic transfer
Payment transferred directly from one bank account to another.
Standing order
An agreement made with a bank to transfer a fixed sum of money to a third-party account on a set dat on a regular basis.
Direct debit
An agreement made with a bank allowing a third party to withdraw money from an account on a set day to pay for goods and services received.
Pre-paid card
Money is uploaded onto a card with transactions then withdrawn to reduce the balance.
Contactless card
Cards with an embedded chip and antenna that enables consumers to wave their card over a reader at the point of said for an automatic transaction.
Charge card
Issued by financial institutions allowing customers to delay payments for goods and services for a short period of time with the balance being paid off in full at each statement date.
Store card
Issued by a retail outlet to allow customers to delay payments for goods and services - similar to a credit card but only for the stores specified.
Mobile banking
The ability to carry out financial transactions using mobile devices such as phones or tablets.
Bankers Automated Clearing Service (BACS)
A system that allows the transfer of payments directly from one bank account to another in 3 working days.
Clearing House Automated Payment Systems (CHAPS)
A system that allows the transfer of payments directly from one bank to another, usually on the same day.
Standard account
This type of account provides full day-to-day banking facilities e.g. cheque book, debit card, easy access to your money and an authorised overdraft facility.
Packaged, Premium account
This type of account usually has an annual fee or additional charge in return for offering extra incentives. These benefits can vary but may include offers such as discounted home insurance, no fee overdraft, and premium access to popular event tickets.
Basic account
This account offers limited features and would be typically held by a person with no credit history in the UK or a poor credit history.
Student account
These are designed to assist young people and students to become prudent with their personal finances. They may come with bonus features . such as interest free overdraft facilities.
Overdraft
Allows an individual to withdraw money that they do not actually have from a current account.
Personal loan
Allows an individual to borrow a set amount of money which is to be repaid in regular instalments, with interest.
Hire purchase
Allows an individual to have use of an item immediately but pay for it in regular instalments. The item is only owned by the individual when the final instalment has been paid.
Mortgage
A long-term loan to fund the purchase of assets which be repaid over a long period of time e.g. a property over 25 years
Payday loan
A short-term source of finance that can help to bridge the gap between the present moment in time and receiving a wage.
Individual savings account (ISA)
A tax-free way to save or invest.
Deposit and savings accounts
An account where interest is paid on the balance.
Premium bonds
A government scheme that allows individuals to save, up to a set amount, in bonds. No interest is earned but the bond is placed into a regular draw for cash prizes.
Bonds and gilts
These are fixed term securities where the individual lends money to companies and governments in return for interest payments.
Shares
Investments in a business in return for equity. The shareholder becomes a part-owner of the business.
Pensions
Long-term savings plans where individuals make regular contributions through their working life. This is then repaid upon retirement, either as a lump sum or in regular payments.
Car insurance
Insurance that covers both theft and accidents - there is a legal requirement to insure any car that is on the road and this protects the driver, passengers and other road users.
Home and contents insurance
Covers the physical buildings against events like a fire or flood damage. Also covers the physical items inside the house and when they are used away from home.
Life assurance
An ongoing policy to pay a lump sum upon death.
Life insurance
A policy for a set period of time to pay a lump sum if you die within that period.
Travel insurance
Protects individuals or groups while abroad. Cover usually includes illness, loss or theft of property, cancellation and emergencies up to predetermined limits.
Pet insurance
Protects the owners of pets against some or all of the expenses associated with treating an injured or sick animal.
Health insurance
Covers individuals, families or employees against medical expenses including assessments, treatments and loss of earnings. In the UK, this can pay for private treatment or payment plans for routine visits.
Bank of England
The UK’s central bank with responsibility for maintaining a healthy level of financial stability for the UK as a whole.
Banks
An organisation that handles financial transactions and stores money on behalf of its customers.
Building societies
Organisations that handle financial transactions and store money on behalf of their members. Members are part-owners of the building society and have a right to vote and receive information on the running of the society.
Credit unions
Not-for-profit Organisations that handle financial transactions and store money on behalf of their members.
National Savings and Investment
A government-backed organisation that offers aaa secure savings option.
Insurance companies
Businesses that protect against the risk of loss in return for a premium. They are profit making organisations.
Pension companies
Businesses that sell policies to individuals, whether privately or through employers, to allow them to save now to fund retirement in the future.
Pawnbrokers
Businesses or individuals who loan money against the security of a personals asset.
Branch banking
A physical place where the customer will visit to carry out transactions.
Online banking
The use of the internet to carry out banking transactions.
Telephone banking
The use of a telephone to carry out banking transactions which may use either an automated service or require a customer advisor.
Mobile banking
The use of mobile devices e.g. mobile phones and tablets, to conduct financial transactions.
Citizens advice
An organisation, run by charities, that offers advice on a wide range of issues both financial and non-financial.
Independent financial advisor (IFA)
Professionals who offer independent advice to their clients on financial matters e.g. savings, mortgages and investments.
Price comparison sites
Websites that collate prices for similar goods and services within an industry, allowing consumers to select the best deals.
Money advice services
A government organisation set up to offer free and impartial financial advice in the UK.
Debt counsellors
A professional who offers independent advice on how to best manage debt.
Individual Voluntary Arrangements (IVAs)
A government organisation that allows an individual to declare themselves bankrupt while agreeing to pay all or part of the money they owe to creditors.
