TOPIC 1 - 1.8 Financial products and services

TOPIC 1 - 1.8 Financial products and services

1. opportunities are offered to an individual to maintain sustainable personal finances for example full range of financial products and services available from banks, building societies and other financial services providers, such as credit unions and friendly societies

2. CURRENT ACCOUNTS

   • Banks and building societies are the main providers of current accounts, which allow for the safe storage of money
   • holders of current accounts can make payments using
     • cheques
       • direct debits
         • telephone banking
           • mobile banking
             • standing orders
               • debit cards
                 • internet banking

3. SAVINGS ACCOUNTS

   • customers are effectively lending money to that financial institution, which the institution can then use to fund loans, overdrafts and credit cards to other customers.
   • regular (monthly) savings accounts
     • notice savings accounts
       • fixed-term, fixed-interest savings bonds or deposit accounts
         • credit union savings accounts
           • National Savings and Investments

4. BORROWING PRODUCTS

   • If borrowing is unplanned and the borrower fails to consider whether they will be able to afford to pay the regular monthly payments then n borrowing can lead to problems that might damage the sustainability of the individual’s finances.
   • The main products that allow people to borrow money
     • overdrafts
       • personal loans
         • credit cards
           • store cards
             • mortgages

5. INSURANCE

   • General insurance – usually short term), this insurance is designed to protect: − your home, your car and your income and health
   • Life insurance – also called life assurance, this pays out a sum of money when someone dies
   • Income protection insurance provides a monthly income to replace salary or wages if you are unable to work as a result of illness or disability

6. PENSIONS

   • People save in pension schemes throughout their working lives so that they will have an income in their retirement
   • state pension
     • occupational pensions
       • personal pension plans
         • stakeholder pensions
           • the National Employment Savings Trust

7. INVESTMENTS

   • People put money into investment products because of their potential to achieve very high returns. But the promise of high returns is balanced by the increased risk of losing some or all of the money invested.