Podcast
Questions and Answers
What is the main function of a standard current account?
What is the main function of a standard current account?
- To provide professional financial advice
- To pay bills and receive payments (correct)
- To provide investment opportunities
- To offer high interest rates on savings
What is a notable disadvantage of packaged/premium current accounts?
What is a notable disadvantage of packaged/premium current accounts?
- They do not provide any perks
- They limit the amount you can spend
- They require a high credit score
- They often charge high monthly fees (correct)
Which group of individuals is a basic bank account primarily designed to assist?
Which group of individuals is a basic bank account primarily designed to assist?
- People who frequently travel abroad
- Individuals with high credit ratings
- Individuals with poor credit ratings (correct)
- Students seeking financial independence
Which of the following is a feature not typically offered by basic accounts?
Which of the following is a feature not typically offered by basic accounts?
What advantage do packaged/premium current accounts offer?
What advantage do packaged/premium current accounts offer?
Why do banks create basic accounts?
Why do banks create basic accounts?
Which of the following best describes a potential disadvantage of standard current accounts?
Which of the following best describes a potential disadvantage of standard current accounts?
What might a disadvantage of packaged accounts specifically highlight?
What might a disadvantage of packaged accounts specifically highlight?
Flashcards
Standard Current Account
Standard Current Account
A main bank account, used for paying bills, receiving wages/salary, benefits and sending money through standing orders.
Packaged/Premium Current Account
Packaged/Premium Current Account
A current account with added benefits like insurance (holiday, gadget, health, breakdown cover) and cashback, for a monthly fee.
Basic Bank Account
Basic Bank Account
A bank account with limited features, designed for people with poor credit ratings, with restricted borrowing options.
Advantages of Standard Current Account
Advantages of Standard Current Account
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Disadvantages of Standard Current Account
Disadvantages of Standard Current Account
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Advantages of Packaged/Premium Account
Advantages of Packaged/Premium Account
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Disadvantages of Packaged/Premium Account
Disadvantages of Packaged/Premium Account
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Advantages of a Basic Bank Account
Advantages of a Basic Bank Account
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Study Notes
Level 3 Business Finance: Unit 3
- Lesson Objectives:
- Identify different bank account types
- Analyze reasons for choosing specific accounts
- Evaluate advantages and disadvantages of each account type
Standard Current Accounts
- Definition: A standard current account (debit account) is the most common type of account.
- Functions: Paying bills, receiving wages/salary, receiving benefits, sending money via standing orders
- Features: Banks offer various features for standard accounts.
Packaged/Premium Current Accounts
- Definition: Offer additional benefits for a monthly fee.
- Benefits: Insurance (holiday, gadget, health), breakdown cover, cashback
- Why banks offer these accounts: Potentially attract customers by simplifying insurance and offering other perks.
Basic Accounts
- Definition: Limited features, primarily for individuals with poor credit ratings.
- Features: No borrowing options, some banks may not offer debit cards.
- Purpose: Designed to help 1.2 million UK citizens without bank accounts.
Account Type Comparisons
| Account Type | Advantages | Disadvantages |
|---|---|---|
| Standard | Convenient bill payment, receiving payments, includes overdraft, cash cards, cheque books | Potential high overdraft fees, no extra perks |
| Packaged/Premium | Wide range of perks (insurance, breakdown cover, cashback), simplify insurance | Monthly fees can be high, not all products might be useful for customer |
| Basic | Gives people with bad credit access to a bank account; a way to control their own money | Very basic features, no debit card, no overdrafts |
Student Accounts
- Benefits: Large overdrafts, Railcards, cashback on purchases, discounts
- Conversion: Accounts can be converted to regular accounts after studies end.
Task
- Group Research: Groups should research various account types.
- Customer Profiles: Create profiles of typical customers for each account, including circumstances and desired account features.
- Account Appropriateness: Evaluate the appropriateness of customers' chosen accounts.
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