Unit 3 continued

Question 1

Bank of England 3 roles

Answer 1

decide interest rates
issue bank notes to shops
keep watch on financial system

Question 2

Bank

Answer 2

financial service that offers wide range of services, from loans to deposits

Question 3

Bank +

Answer 3

.safe
.can access online
.wide range of services

Question 4

Bank -

Answer 4

.low - no interest rates on saving

.lots of fees

Question 5

Building society

Answer 5

Similar to a bank. They offer wide range of services but are run by members so have no shareholders

Question 6

building society +

Answer 6

.low running costs - competitive interest rates
.protected by FSCS
.can be converted to PLC if voted by 75%

Question 7

building society -

Answer 7

less secure than a bank

often geographical restrictions - less common than banks

Question 8

credit union

Answer 8

community banks

members save with them, and the money is borrowed by other members

Question 9

credit union +

Answer 9

low interest on borrowing
run by members - good customer service
not focused on making profits - high saving interest

Question 10

credit union -

Answer 10

must be a member

few branches - not very common

Question 11

National savings and investment

Answer 11

a government backed form of savings account

Question 12

National savings and investment +

Answer 12

secure

no limit to how much is protected

Question 13

National savings and investment -

Answer 13

minimum balance requirements
monthly fees
low interest on savings

Question 14

insurance companies

Answer 14

a company that provides and sells insurance.

Question 15

insurance company +

Answer 15

helps business protect employees

helps businesses reduce risks

Question 16

pension company

Answer 16

company which pay agreed amount of your salary into your pension on each pay day

Question 17

pawnbroker

Answer 17

Pawnbrokers offer secured loans, which allow you to use your personal property as collateral

Question 18

pawnbroker +

Answer 18

no credit score checks
doesn’t impact credit score
can retain ownership of your assets

Question 19

pawnbroker -

Answer 19

risk of losing items
short term only
very high interest rates

Question 20

payday loans

Answer 20

a relatively small amount of money lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next wages

Question 21

payday loan +

Answer 21

quick and convenient

Question 22

payday loans -

Answer 22

very expensive to pay off - high interest

some offer up to 3 months to pay off, but some will demand it in full the next time you receive wages

Question 23

Branch banking

Answer 23

going to a physical store, usually in a high street, and interacting face to face

Question 24

online banking

Answer 24

accessing your bank account and carrying out financial transactions through the internet on your smartphone, tablet or computer

Question 25

online banking +

Answer 25

quick

doesnt require speaking to anyone - no communication issues

Question 26

online banking -

Answer 26

banking information at risk

cant make deposits

Question 27

telephone banking

Answer 27

where a bank allows a customer to make transactions over the telephone

Question 28

telephone banking +

Answer 28

customer service - due to human interaction

safe and secure

Question 29

telephone banking -

Answer 29

not always 24hrs