unit 1.7 - providers Flashcards
AER
annual equivalent rate is the interest rate that will be earned on the money in one year and tajes into account how often the provider pays the interest, the effect of compounding the interest and any fees and charges
assets
things that a person or a business owns.
cash card
card used to withdraw cash from arms or branch counters
cash isa (individual savings account
account that pays interest tax-free on cash savings up to a certain level
chancellor of the exchequer
the British cabinet minister responsible for financial and economic matters and in a charge of the treasury.
cheque
written instruction to the provider to pay an amount from one person to another person or organisation.
common bond
interest or circumstance shared by a group of people.
communication channel
medium through which information is transferred to its intended recipient. in financial services, it refers to the way a customer can contact their provider and manage their account. (Distribution channel)
credit card
card that allows the holder to make purchases. Transactions are paid by the card provider. Card holder repays the amount owed to the provider in instalments or in one payment. Provider charges interest on cash withdrawals is made and on purchases after a certain period.
credit union
mutual organisation (that’s owned by its members) that providers a range of financial products to its members. Members of a credit union must share a common bond (e.g. all work in the same area)
credit union
mutual organisation (that’s owned by its members) that providers a range of financial products to its members. Members of a credit union must share a common bond (e.g. all work in the same area)
credit union
mutual organisation (that’s owned by its members) that providers a range of financial products to its members. Members of a credit union must share a common bond (e.g. all work in the same area)
current account
bank or building society accounts where people store their money in a form of an electronic balance and withdraw it to make payments.
demutualisation
process whereby a mutual organisation (eg building society) legally becomes a shareholder-owned joint stock company (eg a bank)
DEBIT CARD
card that can be used to withdraw cash, make face-to-face transactions, online or over the phone.
direct debit
electronic payment out of an account.
dividend
payment of profits from a company to its shareholders, (often twice yearly) either as cash or as further shares or reacquisition of shares
financial conduct authority (FCA)
one of the 2 main regulators in the UK. Responsible for regulating the conduct of business and setting rules for businesses to follow.
financial services compensation scheme
compensation scheme that pays compensation to account holders up to a certain amount per provider if the provider goes into default.
insurance
products that give financial protection against certain events.
interest rate margin
difference between the interest rate that a bank charges on borrowing products and interest paid on savings
life assurance
type of insurance policy that pays out a sum of money if the insured person dies.
life cover
same as life insurance
mortgage
loan taken out to pay for a property, usually over a long period of time
mutual organisation
an organisation owned by its customers, who are also members, rather than shareholders
NS&I
National savings and investments , a provider that is backed by the treasury. It offers savings and investments products to the public.
OVERDRAFT
facility that allows an account holder to withdraw more money than what is in their account. Authorised overdraft os agreed with the bank in advance with limits. Exceeding this is an unauthorised overdraft, and may not be authorised.
personal loan
product that allows someone to borrow a fixed amount over a fixed period at a fixed interest rate.
premium bond
lottery bond, by NS&I, entered into a monthly prize draw with tax-free prizes or ‘premiums’. Bonds must be held for a colander month after the month in which they were purchased, and retain an equal chance of winning until cashed in.
prudential regulation authority (PRA)
One of the 2 main regulators of financial products in the UK. The PRA, through regulation, sets standards/policies which it expects firms to meet and monitors compliance against these.
Public limited company (PLC)
large company whose shares are sold and traded to the general public. The shareholders have limited liability, up to the value of their investment , for the company’s debts.
rate of return
amount a save gains in interest on their savings. 0.2% APR is lower rate of return than 0.4% APR
savings bond
savings product held for a fixed period. The holder can only make a limited number of withdrawals, or none, without incurring a penalty.
standing order
electronic payment out of an account. Standing order are used to make regular payments of the same amount.
stocks and shares
stocks shares and equities are words used to describe an investment that gives the holder part ownership of a company. If the company value increases, so does your share, if it decreases, your shares do as well. Shares are bought and sold on stock exchanges
travel insurance
A product providing coverage for unexpected events such as trip
cancellation, medical expenses, travel delays and other losses
incurred while travelling.
treasury
her majesty’s treasury, the government department responsible for development and implementation of financial and economic policy.
