Banking and Money

Question 0

Name some functions of money

Answer 0

Puts a value on objects
A means of exchange
A store of wealth
It gives us a credit system

Question 1

What is money

Answer 1

Money is anything that is mostly excepted in exchange for goods and services

Question 2

What do commercial banks do

Answer 2

They operate:
Current accounts
Deposit accounts
ATMs 
Provide loans
Night safes
24 hour banking service through the Internet
Foreign currency exchange

Question 3

What is a current account

Answer 3

An account that we use for day today expenses,

Question 4

Name some services available with a current account

Answer 4

ATMs 
Standing orders
Direct debit 
Cheque book
Overdrafts
Pay path

Question 5

Is there a fee for current account services

Answer 5

Yes

Question 6

What is an overdraft

Answer 6

When the bank let you to go into minus money. Give example. You pay interest on an overdraft

Question 7

What does ATM stand for

Answer 7

Automated teller machine

Question 8

Name some services an ATM provides

Answer 8

Check your balance
Take out money from your bank account
Top up your phone

Question 9

What is an ATM operated with

Answer 9

A PIN number

Question 10

What does a PIN number stand for

Answer 10

Personal identification number

Question 11

What is pay path

Answer 11

How an employer pays an employee wages electronically directly into their bank account which makes it safer more convenient and faster

Question 12

What is a standing order

Answer 12

Way to pay bills. You pay a fixed amount on a fixed date, when you tell, the bank to pay an amount of money to the 3rd party every week/month etc…
Give example

Question 13

What is a direct debit

Answer 13

Way to pay bills but amount of money varies. You allow a third party to access your bank account, give example

Question 14

What is the difference between DD and SO

Answer 14

SO is a fixed amount and DD is a varied amount.

Question 15

What is barter

Answer 15

Is the swapping of one good for another

Question 16

Explain a cheque

Answer 16

This is a written instruction to a bank to pay a stated sum of money to a stated person or to the bearer of the cheque

Question 17

What is a bank draft

Answer 17

This is when in a cheque the bank is both the drawer and the drawee

Question 18

Explain legal tender

Answer 18

Is the form of money that a creditor is legally obliged to take up in payment of debt

Question 19

What is a credit transfer

Answer 19

This is a system where people can transfer money from their bank account to another persons bank account

Question 20

In terms of cheques who is the drawer drawee and payee

Answer 20

Drawer is the person who makes out cheque
The drawee is the drawers bank
The payee is the person to whom the cheque is payable

Question 21

Explain stale check

Answer 21

A cheque that has not been crashed or lodged within six months of the date written on it

Question 22

Name three places to invest money

Answer 22

Deposit account
Shares
Property

Question 23

Why do people save money

Answer 23

To purchase an expensive item
To earn interest
For precation
To provide for children’s education

Question 24

What is DIRT

Answer 24

Deposit Interest Retention Tax | A Tax that reduces the amount of interest earned on saving money

Question 25

What should a person consider before saving or investing

Answer 25

Interest rates Tax, subject to DIRT Convience- can you access money from ATM.

Question 26

Factors to consider before borrowing

Answer 26

How long do the repayments last How much is the interest on the loan/mortgage Can I afford the repayments or do I have other financial commitments Where can I get the best loan, mortgage

Question 27

Explain mortgage

Answer 27

A long term loan used for purchasing a house. This loan requires collateral such as deeds to the house. Usually repayed over 20/30 years

Question 28

Three requirements to open a bank account

Answer 28

Proof of address ex. Bill Proof of identity ex. Passport PPS number Source of income

Question 29

Give two differences between a current and deposit account

Answer 29

Current account may have an overdraft facility where more money than in account can be withdrawn. Deposit account only balance can be withdrawn Deposit accounts gain interest. Not offered for current account mostly but sometimes is with a minimum amount of money in account

Question 30

How are pension funds transferred to bank account

Answer 30

Electric fund transfer- pension is put directly into bank account by pension provider

Question 31

Methods of withdrawing money for a current account

Answer 31

``` Withdrawal slip Cash back ATM Standing order Direct debit ```

Question 32

Explain collateral

Answer 32

An item of value kept given to a financial institution from a borrower as a type of security on a loan. This can be sold or kept by the institution if loan is not repaid in full eg. Deeds to a house