Features Of Financial Institutions

Question 1

Building society key features, advantages and disadvantages

Answer 1

KEY FEATURES : A mutual financial institution that is owned by and run by its members, primarily offer savings accounts and mortgages, regulated by FCA

ADVANTAGES: you can have a voice on how the society is run, pay interest on credit balance for most accounts

DISADVANTAGES: savings are only secured up to £85,000 so if you have more saved if society goes bankrupt then you will loose ur money, may have geographical restrictions

Question 2

Credit unions key features, advantages and disadvantages

Answer 2

KEY FEATURES: not-profit organisation that offers savings and loans on behalf of there customers

ADVANTAGES: low loan/borrowing rates, secure

DISADVANTAGES: lower business drive then banks, savings are only secured up to £85,000 so if you have more saved if society goes bankrupt then you will loose ur money

Question 3

Bank of England key features, advantages and disadvantages

Answer 3

KEY FEATURES : UKs central bank, responsible for maintaining a healthy level of stability in the UK

ADVANTAGES : responsible for financial stability of the economy, set interest rates that help the economy

DISADVANTAGES : not a bank for general public, can raise interest therefore making borrowing extremely expensive

Question 4

BANK key features, advantages and disadvantages

Answer 4

KEY FEATURES: an organisation that handles financial transactions and stores money on behalf of individuals and organisations

ADVANTAGES : offers a range of services and account types, provides a secure place to store money

DISADVANTAGES : savings are only protected up to £85,000

Question 5

NATIONAL SAVINGS AND INVESTMENT key features, advantages and disadvantages

Answer 5

KEY FEATURES : government backed organisation that offers a range of options including ISAs, premium bonds, bonds and gilts

ADVANTAGES : government backed so 100% secure, offers additional methods of saving e.g. premium bonds

DISADVANTAGES : interest rates are variable, often need to give notice with money withdrawal

Question 6

PENSION COMPANIES key features, advantages and disadvantages

Answer 6

KEY FEATURES : a business that sells pensions through an employer or privately

ADVANTAGES - provides a structure for retirement, experts make investment decisions

DISADVANTAGES - money invested cannot be taken out before an agreed date

Question 7

PAWNBROKERS key features, advantages and disadvantages

Answer 7

KEY FEATURES - lets you borrow money in exchange for your goods and valuables. You choose to wither sell or agree to collect the, once you have repaid the loan

ADVANTAGES - quick, easy, no credit checks

DISADVANTAGES - risk of losing ur item, high interest rates