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Chapter 06
Financial Services for Individuals and Households
| Question | Answer |
|---|---|
| Financial institution def | Provides financial services for its customers such as storing money, managing payments and providing loans |
| Types of financial institutions | Commercial bank Credit union Building societies An Post |
| Commercial bank def | Bank that offers financial services to general public and businesses |
| A financial institution offers… (4) | Current accounts Deposit accounts Internet and telephone banking Credit/debit cards |
| Current account def | Used for day to day banking |
| Lodgement def | Amount paid into account |
| Withdrawal def | Amount paid out of account |
| 3 things you need when opening a current account | Photographic proof of identity Proof of address Personal Public Service Number (PPSN) |
| Paypath def | A system in which an employee transfers wages directly into account of employee |
| ATM stands for | Automated Teller Machine |
| PIN stands for | Personal Identification Number |
| Debit card def + 1 advantage | Allows consumers to pay for goods/services without cash Adv: safer as it eliminates need to carry cash |
| Contactless payment def + 1 advantage and one disadvantage | Faster way to use debit card for purchases under €30 without using PIN Adv: safer as it eliminates need to carry cash Disadv: if card is stolen it can be used without PIN |
| Digital wallet def | Online services for electronic transactions |
| Direct Debit (DD) def | Amount to be paid or the payment date are likely to change |
| Standing Order (SO) def | Instruction to financial institution to pay a fixed amount to a specific person on a certain date |
| Credit Transfer def | Once off instruction from current account holder to their bank to transfer an amount of money to another account |
| Cheque def | Written instruction from account holder to a banks own account rather than a customers |
| Bank draft def | Like a cheque but written on a banks own account rather than clients |
| Bank statement def | Statement from bank to account holder, stating all transactions that had taken place during that time period. |
| Rule of bank statement | In the ACB, the account holder will debit money in and credit money out. On the bank statement, the bank will debit money in and credit money out. |
| Internet/online banking def + one advantage and disadvantage | Useful way to pay bills, check account balance etc. Adv: convenient, 24/7 Disadv: security risk, someone may hack account |
| Deposit account def | Way of saving while earning interest |
| Credit card def + one advantage and disadvantage | Buy now, pay later Adv: don’t need money available to pay for good/service Disadv: interest |
| Charge card def | Like credit card but must be settled when statement arrives |
| Exchange rate def | Price at which one currency can be exchanged for another |
| Rule for calculating exchange rates | Converting from euro - multiply by banks sells rate Converting to euro - divide by bank buys rate |
Created by:
TomDel123
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