Aim B Flashcards
(30 cards)
9 financial institution
-bank of England
-banks
-national saving and investing
-pension companies
-insurance companies
-pawnbrokers
-building society
-credit union
-payday loans
advantages of bank of England
sets interest rates
lends to banks
responsible for protecting financial stability of economy
disadvantages of bank of England
not a bank for the general public
can make interest rates to high making borrowing difficult
advantages of banks
offers a range of services and account types
provides a secure place to store money
pays interest on credit balance
disadvantages of banks
savings only protected against £85000
profit making organization therefore costs may be higher in order to fulfill shareholders needs
advantages of a building society
offers a range of services and account types
provides a secure place to store money
pays interest on credit balance
owned by members therefore costs can be kept down
disadvantages of building society
savings only protected against £85000
may lack the business drive
advantages of credit union
offers a range of services and account types
offers additional benefits
owned by members therefore costs can be kept down
provides a secure place to store money
disadvantages of credit union
savings only protected against £85000
may lack the business drive
advantages of national saving and investments
government backed therefore offering 100% security with no limit
offers additional services like premium bonds
disadvantages of national saving and investing
rates are variable
not easy access due to lack of highstreets presence
often requires to give notice before withdrawals
advantages of insurance companies
protects against unexpected loss and financial expenses
easy and regular payment makes budgeting easier
wide range of services
disadvantages of insurance companies
profit making organizations therefore costs will be high
costs are assessed on estimate
advantages of pension companies
provides a structure of financial security after retirement
deductions taking directly from pay
experts employed to make investment decisions
disadvantages of pension companies
money invested cannot be released prior to the date
poor investment decisions may result in a disappointed return
advantages of pawn brokers
a quick way to access cash
interest not charged
disadvantages of a pawnbrokers
the money returned may not be worth he value of an asset
if not repaid asset will continue to be sold on
advantages of a payday loan
a quick way of acquiring cash
disadvantages of a payday loan
interest rates are higher
paying back is a lot higher then borrowed
5 methods of communication
branch
telephone
postal
mobile
online
branch advantages
opportunity to built a relationship
transactions can be conducted then and there
additional services can be offered
gives customer a high level of confidence
disadvantages of branch
need to travel which can have additional costs such as parking fee
restricted bank open hours
time consuming- long queues
advantages of online bank
available 24/7
high level of privacy
convenient
disadvantages of online bank
takes time to set up
cant withdraw cash
increase risk of cyber crime
limited facilities
