Cefs - Unit 1 Topic 7

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  • Created on: 17-03-14 21:00
AER
Annual Equivalent Rate is the interest that can be earned on money in one year, it takes into account how often the provider pays the interest (for example, monthly or annually), the effect of compounding the interest and any fee charges.
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Assets
Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares.
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Cash Cards
A card used to withdraw cash from ATMs or branch counters.
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Cash ISA
An account that pays interest tax-free on cash savings unto a certain level.
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Chancellor of the Exchequer
The British cabinet minister for financial and economic matters and is in charge of the treasury.
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Cheque
A written instruction to a provider to pay a specific amount to a specific person/organisation. (The law relating to cheques is complex and this is a simplified explanation for the purpose of the study text).
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Children's Bonds
Investment bond taken out by a parent, legal guardian or (great) grandparent for a child under 16. Invests between £25 and £3,000. Guaranteed interest at a fixed rate for 5 years after which the bond matures. A P/G manages bond until C is 16.
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Common Bond
An interest or circumstance shared by a group of people, for example working for the same employer or living in a certain area.
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Communication Channel
The medium through which information is transferred to its intended recipient, e.g. email, telephone. it refers to ways customers can contact providers and manage their account (can also be referred to as a distribution channel).
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Credit Card
A card that allows the holder to make purchases face-to-face, online or over the phone and to withdraw cash form an ATM. Unlike a debit card the transaction is paid for by the provider and charged interest from a certain time period.
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Credit Union
A mutual organisation (owned by its members) that provides a range of financial products e.g. savings accounts and personal loans to members. Members must share a common bond such as working for the same employer/living in the same area.
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Current Account
Bank or building society accounts where people can store their money in the form of electronic balances and withdraw it to make payments.
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Debit Card
A card that can be used to withdraw cash, make face-to-face transactions in for example shops and make payments online or over the phone.
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Demutualisation
The process by which a mutual organisation (e.g. a building society) legally becomes a shareholder-owned joint stock company (e.g. a bank).
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Direct Debit
An electronic payment out of an account. The amount and frequency of a direct debit can vary.
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Dividend
A payment of profits from a company to its shareholders, often at twice-yearly intervals either as cash or (depending on the plan) as further shares or reacquisition of shares.
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Financial Conduct Authority (FCA)
One of the two main regulators of financial services in the UK (the other is the Prudential Regulation Authority)
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Financial Services Compensation Scheme (FSCS)
A compensation scheme that pays compensation to an account holder of up to £85,000 per provider if the provider goes into default (in other words cannot pay account holders the money they have in their accounts).
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Insurance
Products that give financial protection against certain events. For example, someone who has travel insurance might be able to claim back the cost of the holiday if they have to cancel through illness.
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Interest Rate Margin
The difference between the interest rate that a bank charges on borrowing products and the interest rate paid on savings
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Life Assurance
A type of insurance policy that pays a sum of money if the insured person dies.
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Mortgage
A loan taken out for a property, usually over a long term such as 25 years.
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Mutual Organisation
An organisation owned by its customers, who are also its members, rather than shareholders.
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NS&I
National Savings and Investments, a provider that is backed by the Treasury (the government department that manages the UK's finances).
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Overdraft (authorised and unauthorised)
A facility that allows the account holder to withdraw more money than they actually have. An authorised overdraft is agreed in advance within certain limits where as if its unauthorised they have overdrawn without permission/exceeded agreed limits.
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Personal Loan
A product that allows someone to borrow a fixed amount over a fixed time period at a fixed amount of interest.
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Premium Bond
A lottery bond issued by the NS&I entered into a monthly draw to win tax-free prizes/premiums. They must be held for a full calendar month after purchase and retain an equal chance of winning until chased in.
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Prudential Regulation Authority (PRA)
One of the two main financial regulators in the UK (the other is the Financial Conduct Authority).
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Public Limited Company (plc)
A large company whose shares are sold and traded on the to the general public. The shareholders have limited liability up to the value of their investment for the company's debts.
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Rate of Return
The amount a saver gains in interest on their savings. For instance an an account holder paying 0.2% AER offers a lower rate of return than one paying a 0.4% AER.
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Savings Bonds
A savings product held for a fixed period e.g. two years. The holder can only make a limited number of withdrawals, or none at all during that period without incurring a penalty.
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Standing Order
An electronic payment out of an account. Standing orders are used to make regular payments of the same amount.
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Stocks and Shares
Stocks, shares and equalities are all words used to describe an investment that gives the holder part ownership of a company. If company's value increases so does the value of the investment. Shares are bought and sold on stock exchanges.
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Travel Insurance
A product providing coverage for unexpected events such as trip cancelation, medical expenses, travel delays and other losses incurred while traveling.
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Treasury
Her Majesty's (HM) Treasury, the government department responsible for the development and implementation of financial and economic policy.
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Other cards in this set

Card 2

Front

Assets

Back

Things that a person or a business owns. For a person their assets might include property, jewellery or financial products such as company shares.

Card 3

Front

Cash Cards

Back

Preview of the front of card 3

Card 4

Front

Cash ISA

Back

Preview of the front of card 4

Card 5

Front

Chancellor of the Exchequer

Back

Preview of the front of card 5
View more cards

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