Section A types of saving and investment

Question 1

2 advs of savings accounts

Answer 1

Interest is earned on poositive balences

Setting up a regular deposit amount can encourage good financial habits

Question 2

2 dis advs of savings accounts

Answer 2

intrest earned is taxed

intrest earned will be less than - interest on borrowing

Question 3

2 advs of ISA - indivudual saving accounts

Answer 3

income tax is not charged on interest earnt

Interest rates cabe slihgtly higher than other saver accounts

Question 4

2 dis advs of ISAs

Answer 4

limit on the amount than can be placed in an ISA

Notice is required to make withdrawals - and limit on number of withdrawls

Question 5

2 advs of premium bond

Answer 5

Can be easuly withdrawn with no loss or penalty

chance to win more than only with interest

Question 6

2 dis advs of premium bonds

Answer 6

no guarenteed return on investments

amount invested with low returns loses value due to inflation

Question 7

2 advs of bonds + guilts

Answer 7

regular fixed returns

spread risk across a range of markets

Question 8

2 dis advs of bonds + guilts

Answer 8

risk of losing some / all value if the value of b or g falls

interest payments may not be received if issuer cannot make payments

Question 9

2 advs of shares

Answer 9

share prices fluctuate giving potential for high reward

additional benefits for being a shareholder

Question 10

2 dis advs of shares

Answer 10

Share prices fluctuate offering a potential high risk

there is no guarentee of return on investment

Question 11

2 advs of pensions

Answer 11

encourages indivuals to save throughout working life for retirement

some policies are booster by employer contributions = increased value of savings

Question 12

2 dis advs of pensions

Answer 12

Final value of pension is difficult top predict

if individual moves jobs policies can change = may reduce cumulative value of savings