Topic 4 key terms(everyday banking)

Question 1

AER

Answer 1

definition:Annual equivalent rate is the interest that will be earned on the money in one year.Takes into account how often the provider pays the interest

Question 2

ATM

Answer 2

definition:cash machine

Question 3

Basic bank account

Answer 3

definition:a current account that allows people to store their money as an electronic balance and make payments by direct debit

Question 4

budget surplus

Answer 4

definition:a sum of money available once all the essential expenditure in a given period has been made

Question 5

cash card

Answer 5

definition:a card used to withdraw cash from ATMs

Question 6

cheque

Answer 6

definition:a written instruction to the provider to pay a specified amount to a specified person or organisation

Question 7

current account

Answer 7

definition:a bank or building society account where people can store their money in the form of electronic balance and withdraw to make payments

Question 8

debit cards

Answer 8

definition:used to withdraw money make face to face transactions and make payments online or in shops

Question 9

direct credit

Answer 9

definition:electronic payment into an account for example salary or benefits

Question 10

direct debit

Answer 10

definition:electronic payment out of an account,amount and frequency of direct debit can vary

Question 11

HMRC

Answer 11

definition:Her majesty’s revenue and customs-organisation that collects taxes on behalf of government

Question 12

Interest

Answer 12

definition:Money either paid to an account holder by the provider or charged to the account holder by provider,paid onto savings and current accounts and charged on some borrowings

Question 13

Money laundering

Answer 13

definition:process of making ‘dirty’ money(gained by criminal offences) ‘clean’

Question 14

office of fair trade

Answer 14

definition:the government department that monitored how businesses compete with eachother,responsibility shared between financial conduct authority and competition and markets authority

Question 15

overdraft

Answer 15

definition:a facility that allows an account holder to withdraw more money than they have in there accounts

Question 16

packaged account

Answer 16

definition:a current account that offers extra benefits such as travel insurance,for which the account holder pays a monthly fee

Question 17

premier account

Answer 17

definition:a current account that offers additional benefits,such as a personal banker,for wealthy customers who earn more than certain level

Question 18

prepaid card

Answer 18

definition:a card that has to have money credited to it before card holder can use it to pay for goods,once run out can get it topped up again

Question 19

standing order

Answer 19

definition:electronic payment out of an account they are used to make regular payments of same amount

Question 20

statements

Answer 20

definition:record of the transaction on an account,issued at regular intervals

Question 21

student account

Answer 21

definition:designed for students in higher education that charges low interest or no interest on overdrafts and can offer benefits

Question 22

transactions

Answer 22

buying or selling something

Question 23

youth account

Answer 23

definition:current account designed for people under 18,no overdraft facility and not allowed to borrow