Personal Finance Key Terms Flashcards
cash
notes and coins in a wide range of denominations
debit card
issued by banks with payments 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 is transferred directly from one bank account to another
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 or services received e.g. electricity bill
standing order
an agreement made with a bank to transfer a fixed sum of money to a third-party account on a set date on a regular basis e.g. a fixed loan repayment
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money is uploaded onto a card with transactions then withdrawn to reduce the balance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 enable customers to wave their card over a reader at the point of sale 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 store(s) specified
mobile banking
the ability to carry out financial transactions using mobile devices such as phones or tablets
bankers automated clearing service (BACS) faster payment
a system that allows the transfer of payments directly from one bank account to another in 3 working days (unless faster payment is available)
clearing house automated payment systems (CHAPS)
a system that allows the transfer of payments directly from one bank account to another, usually on the same day
standard current 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 current account
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 current accoutn
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 current 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 from a current account that they do not actually have
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 property is only owned by the individual when the final instalment has been paid
mortgage
a long-term loan to fund the purchase of assets e.g. property which will be repaid over a long period of time e.g. 25 years in time and receiving a wage
credit cards
allows an individual to pay for goods or services using a card with a statement issued at the end of each month. the balance can be paid in full without incurring interest, or in smaller amounts with an interest charge
payday loans
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 account
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 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 regular payments
car insurance
to cover both theft and accidents- there is a legal requirement to insure that any car that is on the road and this protects the driver, passenger and other road users
home and contents insurance
home- covers the physical building against events like a fire or flood damage; contents- covers the physical items inside the house and when they are used away from home
life assurance and insurance
life assurance- an ongoing policy to pay a lump sum upon death; life insurance- a policy for a set period of time (e.g. mortgage term) 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 or 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 e.g. vet fees
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 e.g. to the dentist
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 (account holders) 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 a 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 indiviudals, 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 personal asset e.g. an item of jewellery
payday loans
organisations that offer a short-term source of finance to bridge a gap between now and next receiving a wage
branch
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. 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 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 service
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) bankruptcy
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
