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banking Flashcards

(16 cards)

1
Q

What is a Savings Account suitable for?

A

Those who wish to save small sums of money.

Requires a minimum deposit and earns low interest.

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2
Q

What are the main features of a Savings Account?

A
  • Opened with minimum deposit
  • Earns low interest
  • No need to pay bank charges
  • Money can be deposited and withdrawn any time
  • Certain limit on withdrawing money

Designed for easy access to savings.

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3
Q

What is a Fixed Deposit Account suitable for?

A

Those who have extra money to set aside to earn interest.

Requires a large deposit.

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4
Q

What are the main features of a Fixed Deposit Account?

A
  • Opened with large deposit
  • Earns high interest
  • No need to pay bank charges
  • Amount of deposit remains fixed
  • Cannot be withdrawn until a specific period expires

Often referred to as a certificate of deposit.

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5
Q

What is a Current Account useful for?

A

Businesses that need a safe method to make and receive payments.

Requires a large deposit.

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6
Q

What are the main features of a Current Account?

A
  • Earns no interest
  • Has to pay charges if deposit falls below a certain amount
  • Money can be deposited and withdrawn any time
  • No limit on withdrawing money

Designed for frequent transactions.

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7
Q

What is a Bank Loan provided for?

A

To help borrowers acquire or develop infrastructure.

Offered for long-term periods.

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8
Q

What are the main features of a Bank Loan?

A
  • Interest is charged on principal amount outstanding
  • Interest rate is lower
  • Bank will create charge against fixed assets
  • Money paid into the borrower’s account reduces its debt
  • Loan is repaid by standing orders

Typically involves a formal agreement.

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9
Q

What is a Bank Overdraft?

A

A short-term credit facility offered to current account holders.

Helps with cash flow problems.

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10
Q

What are the main features of a Bank Overdraft?

A
  • Interest is charged on the availed amount
  • Interest rate is higher
  • Bank statement will show a debit balance
  • No need for additional collateral

Provides immediate access to funds.

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11
Q

What is a Debit Card?

A

Issued to account holders for making transactions.

Allows direct access to funds in the account.

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12
Q

What are the main features of a Debit Card?

A
  • No limit on usage
  • Money is transferred from holder’s account to retailer’s account
  • No bill is made
  • No interest
  • Holder has to pay bank charges

Used for everyday purchases.

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13
Q

What is a Credit Card?

A

Issued to any creditworthy customer on request.

Allows users to borrow funds for purchases.

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14
Q

What are the main features of a Credit Card?

A
  • There is a limit up to which the card can be used
  • Money is paid by the bank when the card is used
  • Bill is made and sent periodically to the cardholder
  • Interest is charged
  • No transaction-based charges

Typically used for larger purchases.

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15
Q

True or False: A Savings Account earns high interest.

A

False

Savings Accounts generally earn low interest.

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16
Q

Fill in the blank: A Bank Loan is typically repaid by _______.

A

standing orders

Ensures regular payments to the lender.