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Business UNIT 3 Part A > Savings & Investment > Flashcards

Savings & Investment Flashcards

1
Q

What are the 6 types of savings?
1.
2.
3.
4.
5.
6.

A
  1. Individual savings accounts (ISAs)
  2. Deposit and savings accounts
  3. Pensions
  4. Premium bonds
  5. Bonds/ gilts
  6. Shares
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2
Q

What is an ISA?

A

A type of savings account where the holder is not charged tax on the interest received.

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3
Q

What are 2 advantages of ISAs?
1. Interest is not _________.
2. Interest is earned on a _________________ and sometimes slightly higher interest rates than regular saving accounts.

A

taxed

positive balance

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4
Q

What are 2 disadvantages of ISAs?
1. Limit on how many _________ you can withdraw.
2. Limit on ________ you can withdraw (£20,000).

A

times
amount

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5
Q

What is a deposit/ savings account?

A

Accounts where interest is paid onto balance and the holder gives a notice before withdrawing funds.

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6
Q

What is an advantage of a deposit/ savings account?

A

Interest is earned on a positive balance.

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7
Q

What are 2 disadvantages of a deposit/ savings account?

A
  1. Interest rate is low.
  2. Interest is taxed.
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8
Q

What is a pension?

A

A long term savings plan paid back when you retire.

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9
Q

What are 2 advantages of a pension?

A
  1. Encourages people to save money through out working life.
  2. Savings may be boosted by an employer’s contributions.
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10
Q

What are 2 disadvantages of a pension?
1. _________________________ may ___________ the overall cumulative value of the savings.
2. Individuals cannot stop the payments monthly even if they want to _____________________________.

A

Movement between jobs
reduce

purchase other essentials

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11
Q

How can a pension be repaid?
1.
2.

A
  1. Lump sum.
  2. Regular payments.
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12
Q

Who can provide a pension?
1.
2.
3.

A
  1. The state.
  2. A company.
  3. Private pension scheme.
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13
Q

What is a premium bond?
A ________________________ that allows individuals to save money by ___________________.

Each bond is placed into a ____________________________.

A

government scheme
buying bonds

regular draw for cash prizes

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14
Q

What are 2 advantages of a premium bond?
1. Can be easily ____________ without any ________________.

  1. Faster to win money through ________________ than _______________________.
A

withdrawn
penalties

prize draws
waiting for interest

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15
Q

What are 2 disadvantages of a premium bond?
1. No ______________________ on _________________.

  1. The amount invested, (if zero or low
    returns) can ____________________________.
A

guaranteed return
investment

lose value due to inflation

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16
Q

What is a gilt/bond?
These are fixed term securities where a lender ___________________ to ________________ or ____________________ in return for ______________________.

A

lends money
companies
governments
interest payments

17
Q

What is the main difference between bonds and gilts?

A

Bonds are issued by any organisation.

Gilts are bonds issued specifically by the UK government.

18
Q

What are 2 advantages of gilts/ bonds?

A
  1. Regular fixed returns.
  2. Spreads risk across a range of markets.
19
Q

What are 2 disadvantages of gilts/bonds?
1. Risk of losing value of the investment if the bond/gilt value falls.

  1. Interest payments may not be received if the
    lender is unable to make payments.
A

value
investment
falls

Interest payments
lender is unable to make payments

20
Q

Why do gilts have less risk than premium bonds?

A

Premium bonds offer money through prize draws, no interest.

Gilts offer regular interest payments.

21
Q

Shares are an _________________ in a _____________ in return for equity.

A

investment
business

22
Q

The shareholder will receive dividends from
the company’s profits.

What are dividends?

A

A share of profits that a company pays out to shareholders and owners.

23
Q

What are 2 advantages of dividends?
1. Share prices ___________, offering a potential ________________.

  1. Shareholders’ returns can include ____________________ and an ______________________.
A

fluctuate
high reward

dividend payments
increase in share value

24
Q

What are 2 disadvantages of dividends?
1. Share prices fluctuate, offering a _______________________.

  1. There is no guarantee of any returns, as all of an _______________________.
A

potential high risk

investment can be lost

25
Q

Saving is: _________________ in a secure place so that it grows
in value.

Investment is: ____________________________ venture in the hope that it grows in value.

A

Storing money

Commitment to a business

26
Q

What is the risk of saving:
_____________________ can reduce the _________________ of money saved.

A

Inflation in the future
spending power

27
Q

What are 2 rewards of saving money?
1.
2.

A
  1. Interest payments.
  2. Financial security.

Business UNIT 3 Part A (7 decks)

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