Savings Flashcards
1
Q
What are the risks of saving?
A
Information asymmetry
Adverse selection
Moral hazard
Loss of capital from inflation
2
Q
What is the annual equivalent rate?
A
An annual interest rate that reflects what the interest rate would be if it was compounded each year
3
Q
What is the annual limit for a NISA?
A
£15240
4
Q
What is the help to buy ISA.
A
For first time buyers Up to £12000 £200 per person per month Government adds £3000 Limit of £250000 house
5
Q
Who is an NISA especially useful for?
A
Additional rate tax payers
6
Q
What types of savings accounts are there?
A
Instant access accounts
Regular savings
Fixed rate bonds and fixed term accounts that will mature
7
Q
What types of national savings are there?
A
ISAs
Savings accounts
Premium bonds that are entered into a lottery
8
Q
Reasons to save?
A
Transaction motive
Precautionary motive
Speculative motive
