Level 3 BTEC Foundation Diploma Business/Law/Finance PDF

Level 3 BTEC Foundation Diploma Business/Law/Finance Unit 3: Personal and Business Finance Lesson 3 – Learning Aim A Break Time – STARTS AT 1.15PM RETURN AT 1.35PM  Ground Rules Do not use your mobile phones unless you have been asked by a teacher Wear your lanyards at all times L...

Level 3 BTEC Foundation Diploma Business/Law/Finance Unit 3: Personal and Business Finance Lesson 3 – Learning Aim A Break Time – STARTS AT 1.15PM RETURN AT 1.35PM  Ground Rules Do not use your mobile phones unless you have been asked by a teacher Wear your lanyards at all times Learning Outcomes By the end of this session you will be able to….. Identify a range of account products that could be used for personal use. Analyse the advantages and disadvantages associated with each of the identified account types. Evaluate and select the most suitable account type for your individual circumstances.  ACCOUNT TYPES Does your current account meet your needs now? Have you ever seen what else is available on the market place? What features and benefits do other accounts offer? Is it time to change or open up a new account? Look at the account types below – and research them. Give me the advantages and disadvantages of each please. Student Account Standard Packaged/Premium Basic Current accounts A current account is an account with a bank or building society designed for frequent use, e.g. regular deposits and withdrawal. The features of a current account will include; Rate of interest paid on any positive balance Rate of interest charged on a negative balance Overdraft limit Charges on unauthorised overdrafts Additional incentives  Standard account A standard account is the most common account for individuals assuming they have an OK credit rating Common features of a standard account include: Can set up direct debits and standing orders Issued with a cheque book and debit card Is it a good idea to Can pay cash in e.g. wages can be paid directly to the account switch banks Can make cash withdrawals or stay loyal? May offer an overdraft limit Pays and charges interest depending upon whether the balance is positive or negative Packaged, Premium account Offer the same facilities as a standard account but bundled with an additional “package of services” Examples include: Free insurance e.g. home or mobile Find out more about packaged bank phone accounts? Break-down cover Which account is best in your opinion? Justify your answer. Cash back Basic Account Offers only some of the features of a standard current account to those with a low credit rating who may otherwise struggle to open an account Customers are seen as high risk and are therefore not offered credit Can still pay money into the account and make cash withdrawals assuming sufficient funds The only truly free bank account. Student Account A current account designed to meet the specific needs of students Features are likely to include: Process to pay university tuition fees Standing order for accommodation Limited overdraft facilities Incentives to join that particular bank Payment of student loan into the account New students face tricky choice of bank. If you were off to University which account would you chose? Justify your answer.  Advantages and disadvantages Type of account Advantages Disadvantages Standard Widely available Limited additional benefits Overdraft facility Charges on overdraft, bounced Range of services cheques etc. can be high Packaged, premium Range of services Often charge additional fees Additional benefits Generic rather than tailored to Ease of coordinating different individual needs e.g. travel aspects on personal finance e.g. insurance may be of no added insurance included so don’t have benefit to shop around separately Basic An opening account for those Limited services who may otherwise struggle to May attach a stigma be accepted by a financial institution A bank account may be a necessary condition for employment!  ACTIVITY 1 Working individually, you are required to create a matrix (example shown below) which provides details about a variety of account types that you could use as well as discussing the advantages and disadvantages associated with each. Provider Name Account Type Information Advantages Disadvantages about the account  ACTIVITY 2 You will now need to evaluate all of the options which you have researched and select the most appropriate account which meets your individual needs. Be prepared to share your findings and thoughts with the rest of the class. ACTIVITY 3 The PPI scandal has become one of the biggest and costliest insurance scandals within the UK banking system. This assignment looks at how, why and what occurred as a part of the PPI scandal. Answer the following points in your report:  What is PPI insurance?  How was Payment Protection Insurance mis-sold?  Who was most affected by the mis-selling?  What was the extent of PPI mis-selling?  What was the effect of the PPI mis-selling?  What compensation arrangements have been set (use examples of banks/amounts that have been set aside)  What have been the conclusions/recommendations about mis-selling of such products. ACTIVITY 4 Choose a current account that would suit each one:  Elderly retired couple  Student at university  Family with low income and bad credit record  Family with high income and enjoy travelling  Graduate just starting new job  16 year old who hasn’t had a bank account before. ACTIVITY 5 Learning Outcomes By the end of this session you will be able to….. Identify a range of account products that could be used for personal use. Analyse the advantages and disadvantages associated with each of the identified account types. Evaluate and select the most suitable account type for your individual circumstances.