banking Flashcards
(16 cards)
What is a Savings Account suitable for?
Those who wish to save small sums of money.
Requires a minimum deposit and earns low interest.
What are the main features of a Savings Account?
- 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- Money can be deposited and withdrawn any time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.
What is a Fixed Deposit Account suitable for?
Those who have extra money to set aside to earn interest.
Requires a large deposit.
What are the main features of a Fixed Deposit Account?
- 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- Cannot be withdrawn until a specific period expires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.
What is a Current Account useful for?
Businesses that need a safe method to make and receive payments.
Requires a large deposit.
What are the main features of a Current Account?
- 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- Money can be deposited and withdrawn any time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.
What is a Bank Loan provided for?
To help borrowers acquire or develop infrastructure.
Offered for long-term periods.
What are the main features of a Bank Loan?
- 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.
What is a Bank Overdraft?
A short-term credit facility offered to current account holders.
Helps with cash flow problems.
What are the main features of a Bank Overdraft?
- 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.
What is a Debit Card?
Issued to account holders for making transactions.
Allows direct access to funds in the account.
What are the main features of a Debit Card?
- 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.
What is a Credit Card?
Issued to any creditworthy customer on request.
Allows users to borrow funds for purchases.
What are the main features of a Credit Card?
- 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.
True or False: A Savings Account earns high interest.
False
Savings Accounts generally earn low interest.
Fill in the blank: A Bank Loan is typically repaid by _______.
standing orders
Ensures regular payments to the lender.
