Topic 4 - Everyday Banking Flashcards
What makes a good current account?
It has the ability to make payments online
Easy to use as long as account is in credit
Where can you buy a current account?
From banks and building society’s
Sometimes available from retailers who offer packaged accounts
- e.g. m&s bank, wholly owned subsidiary of HSBC
What do all current accounts do?
-offer regular statements online or on paper to enable people to monitor their transactions
What are the 6 types of current accounts?
- basic bank accounts
- packaged accounts
- premium accounts
- standard current accounts
- student accounts
- youth accounts
What is a basic bank account?
- suits people who wish to avoid borrowing, living on benefits or low income who havnt had a current account before
- can be opporeted using cash cards or prepaid cards
What is a youth accounts?
Available for people aged under 18 years old
Don’t offer overdraft facilities
What do youth accounts offer for 16-19 year olds? ( 8 things)
For 16 to 19 year olds:
- cash cards
- cheque book
- debit cards
- direct debits
- mobile banking
- online banking
- standing order
- text alerts
What do youth accounts offer for 11-15 year olds?
Cash cards or debit cards
What is a standard current account?
Full range of current account facilities offered unless overdraft facility is used or services that incur a charge are requested
What is a student and graduate account?
Variation of a standard current account.
Tailore to the needs of students:
- low or no interest overdraft facility
- banks aim to intice students to make an account with them thus provide up to 3% interest
What is interest paid on credit?
When current accounts pay interest on credit balances.
- an example is interest paid at 2% fixed for a year on £1500 that then decreases to 0.25% on the next year
What 4 conditions can be applied to current accounts that pay interest on credit?
- paying in a minimum monthly amount
- keeping the account in credit
- banking online or by telephone
- interest is on aid on balances between certain minimum and maximum amounts
May be fees for holding the account
What is a joint account?
Acccounts held by two or more people.
- suit people who share finances or those who share rented homes.
When would a joint account not be suitable?
For people who have different priorities or attitudes to managing money.
It’s important to note that if a joint account becomes overgrown then all account holders credit becomes affected
What is a packaged account?
An account that offers account holders extra benefits for a monthly fee.
What could a packaged account include? ( 2 examples)
Mobile phone or travel insurance,
car breakdown cover,
discounts on stores
and subscriptions for media services.
What could a packaged account fee be?
£2 to £20
When would a packaged account be suitable?
If the costs of the benefits they will use are greater than annual account fee.
What is a premier account?
An account designed for wealthy customers and offer a range of additional services such as a personal banker to help account holders manage their finances and banking product products
What is required when opening an account?
Proof of identity and address
Why are there requirements when opening an account, and consequences for not following them?
- To prevent money laundering, set out in the money laundering regulations 2007.
- if not followed face heavy fines from the financial conduct authority
What is money laundering?
The term used to describe the ways in which criminals can use accounts to hide the source of their funds for then make payments in supply of their activities.
Why is it important that account holders monitor their transactions?
To ensure they have sufficient money to pay transactions that are due
That they are keeping to their budget
Mistakes havnt born made
Can you switch and close accounts?
Yes. You can do so at any time at no cost
