Topic 7 key terms(providers)

Question 1

AER

Answer 1

definition:annual equivalent rate-interest that will be earned on the money in one year

Question 2

assets

Answer 2

definition:things that a person or business owns

Question 3

bonds

Answer 3

definition:see savings bonds

Question 4

cash card

Answer 4

definition:a card used to withdraw money from ATMs or branch counters

Question 5

cash ISA(individual savings account)

Answer 5

definition:an account that pays interest tax free on cash savings up to certain level

Question 6

chancellor of the exchequer

Answer 6

definition:British cabinet minister responsible for financial and economic matters and in charge of the treasury

Question 7

cheque

Answer 7

definition:written instruction to the provider to pay a specified amount to a specified person

Question 8

common bonds

Answer 8

definition: An interest or circumstance shared by a group of people, for
example working for the same employer

Question 9

communication channel

Answer 9

definition: The 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

Question 10

credit cards

Answer 10

definition: A card that allows the holder to make purchases face to face,online or over the phone, and to withdraw cash from an ATM,transactions are paid by the card provider,the card holder repays the amount owed to the provider either in one payment or instalments interest charged on cash withdrawals

Question 11

credit union

Answer 11

definition:mutual organisation owned by its members that provides a range of financial products to members,the members in credit union must share a common bond

Question 12

current account

Answer 12

definition: Bank or building society accounts where people can store their
money in the form of electronic balances and withdraw it to make payments

Question 13

debit card

Answer 13

definition: A card that can be used to withdraw cash, to make face-to-face
transactions in, for example, shops and online

Question 14

demutualisation

Answer 14

definition: process whereby a mutual organisation (building society)legally becomes a shareholder-owned joint stock company(bank)

Question 15

direct debit

Answer 15

definition: An electronic payment out of an account. The amount and frequency of a direct debit payment can vary

Question 16

dividend

Answer 16

definition: payment of profits from a company to its shareholders, often
at twice-yearly intervals, either as cash or as further shares

Question 17

financial conduct authority

Answer 17

definition: One of the two main regulators of financial services in the UK
(the other is the Prudential Regulation Authority)

Question 18

financial services compensation scheme

Answer 18

definition: compensation scheme that pays compensation to account holders of up to a certain amount per provider if the provider goes into default

Question 19

insurance

Answer 19

definition: Products that give financial protection against certain events

Question 20

interest rate margin

Answer 20

definition: The difference between the interest rate that a bank charges on
borrowing products and the interest rate that it pays on savings

Question 21

life assurance

Answer 21

definition: type of insurance policy that pays out a sum of money if the insured person dies

Question 22

life cover

Answer 22

definition:see life assurance

Question 23

mortgage

Answer 23

definition: A loan taken out to pay for a property,usually over a long term

Question 24

mutual organisation

Answer 24

definition: organisation owned by its customers, who are also its members, rather than by shareholders.

Question 25

NS&I

Answer 25

definition: National Savings & Investments, a provider that is backed by the Treasury

Question 26

overdraft

Answer 26

definition: A facility that allows an account holder to withdraw more money
than they actually have in their account,authorised overdraft is agreed with the bank in advance within certain limits,exceeding those limits or going overdrawn without permission is
an unauthorised overdraft

Question 27

personal loan

Answer 27

definition: product that allows someone to borrow a fixed amount over a fixed period at a fixed rate of interest

Question 28

premium bond

Answer 28

definition: A lottery bond, issued by NS&l, entered into a monthly prize
draw with tax-free prizes or ‘premiums’.

Question 29

prudential regulation authority (PRA)

Answer 29

definition: One of the two main regulators of financial services in the UK
(the other is the Financial Conduct Authority)

Question 30

public limited company (PLC)

Answer 30

definition: A large company whose shares are sold and traded to the
general public,shareholders have limited liability, up to the value of their investment, for the company’s debts

Question 31

rate of return

Answer 31

definition: amount a saver qains in interest on their savings

Question 32

savings bonds

Answer 32

definition: savings product held for a fixed period,the holder can only make a limited number of withdrawals, or none at all, during that period without incurring a penalty

Question 33

standing order

Answer 33

definition: electronic payment out of an account. Standing orders are used to make regular payments of the same amount

Question 34

stocks an shares

Answer 34

definition: Stocks, shares and equities are all words used to describe an
investment that qives the holder part ownership of a company,if company’s value increases, so does the value of your share

Question 35

travel insurance

Answer 35

definition: product providing coverage for unexpected events such as trip
cancellation, medical expenses, travel delays etc

Question 36

Treasury

Answer 36

definition: Her Majesty’s (HM) Treasury, the government department responsible for development and implementation of financial and economic policy