Topic 5: Understand the various choices available for storing money Flashcards
List 2 risky places of storing your money.
- hiding money in your house
- keeping money in a purse, wallet or coat pocket.
Where is the best and safest place to store your money?
With a bank or building society.
What 9 must you consider before you can make an informed choice of where to store your money?
- what access do you want to the savings
- how much can you save
- when you might need the money that you have saved
- how much risk you are willing to take with your money
- the interest rate
- other incentives
- information
- ethics
- culture and religion
Where can you save the most amount of money?
In a bank or building society.
What is a regular savings account?
If you are able to save something from your income every month, you can make a standing order from your bank account to pay a stated amount into your savings account. This type of called is called a regular savings account.
If you need to withdraw money quickly, what type of account should you use?
You should choose a flexible account that gives you “instant access” to withdrawing money whenever you want it without giving the bank any notice.
What might happen to your money if a bank were to go bust?
In the UK, the government guarantees all deposits in banks up to £85,000.
What must all interest rates be quoted as?
All interest rates must be quoted as an AER.
What does AER stand for?
“annual equivalent rate”
List 4 places you can find information out about saving accounts.
- leaflets from the providers
- online information from the providers
- comparison sites on the internet
- articles in newspapers
What will ethical funds/investing ensure?
Ethical funds will ensure that your money is not investing in companies that destroy the environment or those involved in the arms trade, animal testing, gambling, pornography or those that support repressive regimes.
What bank attempts to do business in an ethical way?
The Co-operative bank
What do you have to make decisions about before choosing your saving product? (5 things)
- the amount that you can save
- the length of time for which you want to save
- how important easy access is to you
- the reason why you are saving
- the risk that you are willing to take
What long-term investments are there?
- investing in shares
- buying a property
- paying into a pension
What are the 3 main ports of difference between saving accounts?
- the interest rates paid by the provider
- the amount of money that you need to deposit
- the length of time for which you agree to leave the money in the account
What do banks and building societies offer?
Banks and building societies offer the widest range of savings and investment products fr different terms and with different interest rates.
What does the Post Office provide?
The post office provides a range of saving accounts.
What is the main advantage of the Post Office?
The main advantage of which is the provider’s convenience and that access is simply.
What do supermarkets offer?
Supermarkets offer a wide variety of savings and other products offer.
What does NS&I stand for?
National Savings and Investments
What does the NS&I offer?
The NS&I offers a wide range of saving products to personal savers and investors.
What happens to the money saved by the NS&I?
The money saved is lent to the government to help it pay for public services that are not fully financed by taxes.
What are credit unions?
Credit unions are financial co-operatives owned and controlled by their members.
What do credit unions offer?
They offer savings accounts, and are local, ethical and know what their members want. Many credit unions now offer a range of services, including a savings account, ISAs and Christmas saving clubs.
