Topic 4 - Everyday banking

Question 1

In relation to a cheque, what information would appear in a current account statement?

Answer 1

The cheque number.

Question 2

To be acceptable as proof as a person’s address when opening a current account, a utility bill must be:

Answer 2

Less than 3 months old, according to the BBA

Question 3

Who are premier accounts designed for?

Answer 3

Wealthy customers, particularly those earning £75,000 or more.

Question 4

Name the different types of current accounts

Answer 4

• Standard current account
• packaged account
• basic bank account
• student account
• youth account
• Joint account
• premier account

Question 5

What are basic current accounts?

Answer 5

Accounts for people who wish to avoid borrowing, such as those on benefits or low incomes.

Question 6

What are the features of a basic bank account?

Answer 6

• debit or cash card
• operated free of charge

Question 7

What are youth accounts?

Answer 7

Current accounts for people aged under 18. They do not have overdraft facilities as people need to be over 18 to borrow money

Question 8

Features of youth accounts

Answer 8

• cash cards
• standing orders
• debit cards
• cheques
• online banking
• mobile banking
• text alerts

Question 9

What are standard current accounts?

Answer 9

Accounts for people who pay bills by direct debit, manage their money and borrow money. These offer the full range of current account facilities

Question 10

Feature of standard current accounts

Answer 10

• Cash cards
• debit cards
• direct debits
• standing orders
• overdrafts
• cheque books
• online and mobile banking
• free of charge

Question 11

What are student and graduate accounts?

Answer 11

Thee are current accounts that come in variations based on needs of students in higher education and recent graduates

Question 12

Feature of student accounts

Answer 12

• low interest/no interest overdraft
• discounts on contents and travel insurance policies

Question 13

What are joint accounts?

Answer 13

These are current accounts held by two or more people. These suit people who share finances eg married couples.

Question 14

What are packaged current accounts?

Answer 14

accounts that offer extra benefits for a monthly fee. This fee varies from £2 - £20.

Question 15

Features of packaged current accounts

Answer 15

• mobile and travel insurance
• car breakdown cover
• discounts in stores and subscriptions for media services

Question 16

What are premier accounts?

Answer 16

Current accounts designed for wealthy customers earning a certain level of income of £75,000 and above

Question 17

Features of premier accounts

Answer 17

• personal banker that manages finances

Question 18

What must customers do before opening current accounts?

Answer 18

• give proof of identity and address to prevent money laundering
• this proof must be separate from one another

Question 19

Name all the things that can be accepted as proof of identity or address.

Answer 19

• utility bill that’s less than 3 months old
• council tax bill issued in current tax year
• driving licence issued in the UK
• passport
• employer ID card
• pension
• medical card
• HMRC documents
• insurance certificate less than 12 months old

Question 20

What are the requirements for switching or closing accounts?

Answer 20

Nothing. Providers usually offer free switching and closing services at different providers or accounts held at one provider.