Personal Banking - Chapter 3 Flashcards
What is a current account?
A current account allows you to lodge and withdraw money at any time. This account is used for day-to-day transactions.
What is an ATM?
An ATM is a machine used to withdraw money from a person’s current account.
The correct card and PIN (Personal Identification Number) must be entered.
Name the services of the ATM.
- Withdraw Cash
- Pay bills
- Check Account Balance
- Order bank statement
- Buy mobile phone credit
What is a debit card?
A debit card allows money to be transferred electronically from the customer’s bank account to the retailer’s bank account.
The amount is taken instantly from the customer’s bank account. If there is not enough money in the bank account the card will be declined.
Advantage: Safe and convenient (easy) way to pay for goods and services.
The amount is taken instantly from the customer’s bank account. If there is not enough money in the bank account the card will be declined.
What is a Cheque?
A cheque is a written instruction to a bank to pay a stated sum of money from your bank account to a named person.
If there is not enough money in the account of the person who wrote the cheque, the cheque will “bounce”.
This means that the payment cannot be made.
What is credit transfer (CT)?
Credit Transfer (CT) allows you to transfer money from your own bank account to another person’s bank account.
This can be done in the bank branch by completing a giro or through online banking.
What is a Bank Draft?
Bank Draft is a written document that tells the bank to pay a stated sum of money to a named person.
It is written by the bank and guaranteed not to bounce as you pay the money in advance.
It is a common way to pay for expensive items like cars and houses.
What is Paypath?
Paypath is an electronic way of transferring an employee’s wages from employer’s bank account to employee’s bank account.
What is an employee and employer?
Employee - a person who works for someone else (a person or a company) for a wage or salary.
Employer - a person or company that pays people a wage or salary to work for them.
What is an overdraft?
An overdraft is a permission to withdraw money for more than the balance of money in your current account. Only up to a certain limit.
What is an advantage and a disadvantage of an overdraft?
Advantage: Helpful to pay for household items in the short term if you run out of money
Disadvantage: High Interest is charged
What is an advantage and disadvantage of a paypath?
Advantage for Employer: Safer for Employer as they do not need to handle large amounts of cash on payday
Advantage for Employee: Saves Employee time as the money is already in their bank account
What is a PayPal?
PayPal is safe way to pay for goods online without disclosing your credit card or bank account details.
PayPal transfers money from your account to seller’s account without the seller getting your account details.
What is a Standing Order (SO)?
A Standing Order (SO) is a planned automatic payment to pay a regular fixed amount of money from your bank account to a stated person’s bank account on specific dates/fixed time.
This is used to pay regular fixed bills.
Example: Mortgage
