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UNIT1-3 Review
Personal Financial Management
Term |
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Savings accounts provide a cheque book and pay an interest on the savings in the account. |
Fixed deposits allow you to deposit and withdraw money at any time. |
Combination accounts allow you to write as many cheques as you want without any penalty. |
Savings accounts usually give a higher interest than fixed deposit accounts. |
Combination accounts do not provide you with a cheque book but pay you interest. |
Current accounts pay you interest and give you a cheque book. |
If rate of return on savings is higher than current inflation rate money is losing its buying power. |
Less liquid financial products give higher returns. |
More frequent compounding provides higher rates of return. |
If rate of return on savings is lower than current inflation rate money loses its buying power. |
How many parties are there in a cheque? |
When compared to current accounts fixed deposits are less liquid. |
Which bank account provides a cheque book, interest and an ATM card? |
Which bank accounts provide ATM cards? |
Money can lose or gain buying power when rate of return of savings is compared with current inflation rate. |
Less liquid products give you lower returns. |
When you purchase something using your credit card, the money comes out of your account immediately. |
Anybody holding a bearer cheque can encash it. |
An order cheque does not have the name of the payee written on it. |
A bearer cheque can be paid only into a bank account. |
A specially crossed cheque can be paid only into a specific bank account. |
Cheques are endorsed by writing on the back of the cheques. |
Restrictive endorsement must have the signature of the payee and the word 'only' after the name of the person specified to be paid. |
Managers cheques requires the presence of ATMs and EFTPOS for payments. |
Charge cards are branded cards provided by various retailers. |
Store cards are branded cards provided by various retailers. |
Direct debits are automated payments that help you to make a regular payment. |
When you use a charge card you have to make the full payment when you get the statement. |
Standing orders are automated payments for the same amounts always. |
Direct debits are used when the payments are not always the same. |
Direct debits are only used for very reliable payees. |
In case of payment by credit card, the seller gets immediately paid from your account. |
Payment by debit card requires sufficient balance in your account to make the payment. |
In the case of prepaid cards you are required to make the full payment when you get the statement and cannot carry over the credit. |
A current account enables you to deposit and withdraw money at any time. |
A savings account accumulates your savings. |
A current account does not give interest to the account holder. |
A current account can be used for safekeeping and transmission of money. |
The more frequent the compounding the higher the rate of return will be. |
If rate of return on saving is lesser than current inflation rate, then money loses its buying power. |
If rate of return on savings is higher than inflation rate, money gains its buying power. |
A fixed deposit is less liquid than a current account. |
Less liquid products give you higher returns. |
There are 3 parties in a cheque. |
The customer who writes the cheque is the drawer and the bank on which it is drawn is the drawee and the person who will be paid is the payee. |
A cheque contains an unconditional order to pay a certain sum of money. |
A post-dated cheque has a date in the future. |
Corrections made on the cheque should be initiated by the drawee. |
Crossings ensure the safety of a cheque. |
A cheque that is not crossed is an open cheque. |
Endorsement is the method by which a cheque is transferred from one person to another. |
Cheques are endorsed by writing on the back of the cheque and crossings are made on the front of the cheque. |
Blank endorsement converts an order cheque to a bearer cheque. |
Full endorsement includes the signature of the payee plus clear instructions to pay the amount to a specified person. |
In the UAE, Central Bank is the clearing bank. |
A bank draft is basically a cheque drawn by a bank branch on its head office. |
EFTPOS are the payment machines installed at retailers and other companies and are used to swipe the electronic cards through to make payments. |
Debit cards are also called ATM cards or payment cards. |
The two largest credit card companies are MasterCard and Visa International. |
Diners Club is one of the major charge card companies. |
Store cards are branded credit cards provided by retailers. |
Standing orders are usually given by a customer to his bank to make regular payments. |
A travellers cheque is a guaranteed cheque which can be purchased from a bank or a money exchange. |
A foreign draft is a cheque drawn by a bank on its overseas branch in the country whose currency the cheque is in. |
In case of payment by telegraphic transfer your account in local currency is debited and your beneficiary's account will be credited in their currency. |
First Direct of the UK is the first telephone bank. |
The first ATM machine was introduced in UK in 1967. |