Unit 3 continued Flashcards
Bank of England 3 roles
decide interest rates
issue bank notes to shops
keep watch on financial system
Bank
financial service that offers wide range of services, from loans to deposits
Bank +
.safe
.can access online
.wide range of services
Bank -
.low - no interest rates on saving
.lots of fees
Building society
Similar to a bank. They offer wide range of services but are run by members so have no shareholders
building society +
.low running costs - competitive interest rates
.protected by FSCS
.can be converted to PLC if voted by 75%
building society -
less secure than a bank
often geographical restrictions - less common than banks
credit union
community banks
members save with them, and the money is borrowed by other members
credit union +
low interest on borrowing
run by members - good customer service
not focused on making profits - high saving interest
credit union -
must be a member
few branches - not very common
National savings and investment
a government backed form of savings account
National savings and investment +
secure
no limit to how much is protected
National savings and investment -
minimum balance requirements
monthly fees
low interest on savings
insurance companies
a company that provides and sells insurance.
insurance company +
helps business protect employees
helps businesses reduce risks
pension company
company which pay agreed amount of your salary into your pension on each pay day
pawnbroker
Pawnbrokers offer secured loans, which allow you to use your personal property as collateral
pawnbroker +
no credit score checks
doesn’t impact credit score
can retain ownership of your assets
pawnbroker -
risk of losing items
short term only
very high interest rates
payday loans
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
payday loan +
quick and convenient
payday loans -
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
Branch banking
going to a physical store, usually in a high street, and interacting face to face
online banking
accessing your bank account and carrying out financial transactions through the internet on your smartphone, tablet or computer
online banking +
quick
doesnt require speaking to anyone - no communication issues
online banking -
banking information at risk
cant make deposits
telephone banking
where a bank allows a customer to make transactions over the telephone
telephone banking +
customer service - due to human interaction
safe and secure
telephone banking -
not always 24hrs
