Current accounts

Question 1

Features of a current account

Answer 1

rate of interest paid on any positive balance.
rate of interest charged on a negative balance.
overdraft limit.
additional incentives e.g. breakdown insurance.
paying money in and out.
charges on unauthorised overdraft

Question 2

Standard

Answer 2

It has standard features such as ability to pay and withdraw money. You receive a debit card and are able to pay for things online and set up a prearranged overdraft.

Question 3

Packaged/premium

Answer 3

This account has a monthly fee in return for additional benefits such as breakdown cover, cashback on purchases, home insurance and payment protection.

Question 4

Basic

Answer 4

current accounts used by people with a poor credit rating and struggle to open a standard account.

Question 5

Student

Answer 5

account designed to benefit students, especially useful for students at university. Banks must provide interest free overdraft, rail cards and discounts off eating out.

Question 6

Standard account pro’s and con’s

Answer 6

Pro’s - no charges on credit balances range of facilities and convenient for receiving wages and withdrawing money.
Con’s - potentially high charges on overdraft, standard features - no additional perks

Question 7

Premium account pro’s and con’s

Answer 7

Pro’s - no charges on credit balance, range of facilities, convenient for receiving regular payments, additional perks.
Con’s - additional monthly charge, may not provide value for certain individuals.

Question 8

Basic account pro’s and con’s

Answer 8

Pro’s - available to customers with a low credit rating, easy first step for banking.
Con’s - limited facilities, no debit card or overdraft facility.

Question 9

Student account pro’s and con’s

Answer 9

Pro’s - course fees and student loans can be easily handled, added extra are designed to meet needs of students.
Con’s - overdraft facilities could encourage overspending, charges for overspending are high, limited facilities.