Chapter 4: serving customers Flashcards
- used to hold medium to long term surpluses of funds
- typically operated with a plastic card, mobile app or in a few cases by passbook
- interest is paid by the bank
are key features of what type of account
savings account
- based on a single amount being lodged over a specific term
- level of interest payments generally increase with the amount of time invested
terms offered generally range from 1 to 60 months
are key features of what type of account
term deposits
why were retirement savings accounts introduced
as a simple way for employers and employees to make small or irregular superannuation contributions. returns and generally very low, so they tend to have smaller account balances
what are the three key parties to a payment system
the customer, the trader (retailer) and the bank
a …………. is an extension of credit on a transaction account allowing the account to beome overdrawn without dishouner fees and associated charges
an overdraft, which is established as a revolving line of credit and no formal repayment structures.
is an investment property loan or owner occupied residential mortgage likely to carry a higher interest rate
an investment property loan
in regards to Equity Release products what does the term ‘equity’ refer too
the difference in value between the market value of a property and the total value of the mortgage and other loans secured against the property
what does an equity relase allow
it enables the customer to borrow some portion of their equity, freeing up funds that would otherwise be ‘locked in ‘ until the property is sold.
what are the two broad categories of equity release
- conventional mortgage or re-mortgage
-reverse mortgage
what is bridging finance (loans)
a short term loan used to cover situations where a customer has to pay for a major purchase before receiving the proceeds from a sale of an asset of a similar scale
who are kiwisaver schemes regulated by
the financial markets authority (FMA)
what is underwriting
the process by which an insurer determines whether or not and on what basis they will accept a particular risk
why are indemnity clauses are included in most insurance contracts
to ensure that the policy owner is compensated only for their loss and does not profit and receive an amount in excess of the amount of loss suffered
what are the 3 types of cover are offered on home insurance
- fixed sum insured (most common0 both owber and insurer agree on the total sum the house is insured for
- Indemnity (present day value)
- total replacement
