Business: Financial Institution

Question 1

What is a Financial Institution?

Answer 1

Provides financial services for its customers, including storing their money, managing payments and providing loans.

Question 2

What are the types of financial institutions?

Answer 2

Commercial banks, credit unions, The post office.

Question 3

What is a Commercial Bank?

Answer 3

A bank that offers financial services to the general public and to businesses.

Question 4

What is a Current Account?

Answer 4

A bank account for day-to-day transactions, where income is paid into this account and bills are paid out of it.

Question 5

What is a Deposit Account?

Answer 5

Also known as a savings account, where interest is earned.

Question 6

What are Lodgements?

Answer 6

Amounts paid into the account.

Question 7

What is a Withdrawal?

Answer 7

Amounts taken or paid out of the account.

Question 8

What is a Statement?

Answer 8

A summary of all deposits, withdrawals, and balances in a bank account over a specific period.

Question 9

What is required to open a Current Account?

Answer 9

Photographic ID (e.g. passport), proof of address, Personal Public Service Number (PPSN).

Question 10

How can you lodge money into an account?

Answer 10

By going into a bank, filling out a lodgement form or by using an ATM machine.

Question 11

What does DD stand for?

Answer 11

Direct Debit.

Question 12

What does SO stand for?

Answer 12

Standing Order.

Question 13

What does CT stand for?

Answer 13

Credit Transfer.

Question 14

What does PIN stand for?

Answer 14

Personal Identification Number.

Question 15

What does ATM stand for?

Answer 15

Automated Teller Machine.

Question 16

What is Pay Path?

Answer 16

Wages are transferred electronically from the employer’s bank account into the employee’s bank account.

Question 17

What is a Debit Card?

Answer 17

A card that allows you to transfer money from your account to a retailer’s, you can enter PIN or tap if under 50 euro.

Question 18

What is a Credit Card?

Answer 18

Buy now pay later, high level of interest is charged if not paid in full.

Question 19

What is a Standing Order?

Answer 19

An electronic way of paying bills of a fixed amount on a fixed date, the bank is instructed to do this.

Question 20

What are Credit Transfers?

Answer 20

A once off electronic transfer from your account to another.

Question 21

What is a Direct Debit?

Answer 21

An electronic way of paying bills that vary in amount and while regular may happen on different dates, the company is given permission to take this from your account.

Question 22

What does DR stand for?

Answer 22

Negative.

Question 23

What is Saving?

Answer 23

Not spending all your income.

Question 24

What is Investing?

Answer 24

Putting your money into something to earn a profit, e.g. buying shares or properties.

Question 25

What is Simple Interest?

Answer 25

Interest earned only on an initial investment.

Question 26

What is Compound Interest?

Answer 26

Interest is paid on the accumulated amount in the account.

Question 27

What is DIRT?

Answer 27

Deposit Interest Retention Tax - This is tax payable on interest savings.

Question 28

What is AER?

Answer 28

Annual Equivalent Rate - This is the true rate of interest which the bank would quote you.

Question 29

What are the benefits of Pay Path?

Answer 29

Safer, faster and reliable, convenient, environment friendly.

Question 30

What is a Digital Wallet?

Answer 30

An online service that allows you to make electronic transactions.

Question 31

What is a Cheque?

Answer 31

A written instruction from an account holder to their bank to pay a specific amount of money to a named person or business.

Question 32

What is Telephone Banking?

Answer 32

Managing your bank account by calling a phone number, where you can check balance, transfer money, pay bills, get statements, report lost cards.

Question 33

What is Internet Banking?

Answer 33

Managing your bank account online using a website or app, where you can view statements, transfer money, pay bills, apply for loans, manage investments.

Question 34

What are the advantages/disadvantages of Internet/Telephone Banking?

Answer 34

Convenience, higher interest rate on savings; lack of Wi-Fi may limit access, security risks.

Question 35

What is Phishing?

Answer 35

When scammers try to trick employees into giving away sensitive information like passwords or financial details by pretending to be a trustworthy source.

Question 36

What is Two-Factor Authentication?

Answer 36

A security method that requires you to verify your identity with two different steps, like a password plus a code sent to your phone.

Question 37

What is an Exchange Rate?

Answer 37

The price of one country’s money compared to another’s when you trade currencies.

Question 38

What are Short-Term Loans?

Answer 38

Loans that are repaid within 1 year.

Question 39

What are Medium-Term Loans?

Answer 39

Loans that are repaid in 2-5 years.

Question 40

What are Long-Term Loans?

Answer 40

Loans that take 5 or more years to repay.

Question 41

What is a Charge Card?

Answer 41

A card that lets you buy now but you have to pay the full amount back each month.

Question 42

What is the rule for calculating exchange rates?

Answer 42

Multiply the amount of money you have by the exchange rate to find out how much it’s worth in the other currency.

Question 43

What is the rule for calculating DIRT?

Answer 43

Multiply the interest earned on your savings by the DIRT rate to find out how much tax you must pay.

Question 44

What is the formula for Simple Interest?

Answer 44

Interest = Principal × Rate × Time.

Question 45

What is the formula for Compound Interest?

Answer 45

Interest added to total each year.

Question 46

What is the formula for Insurance Premiums?

Answer 46

Value × Rate.