Essay
Financial Services for Individuals P2 UNIT 1
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Describe three retail banking services appropriate to the needs of two contrasting customers
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In this assignment I will be describing three retail banking services appropriate to meet the needs of twocontrasting customers, which will be a married couple age 30 and over who want to move into their first
house and in need of larger second hand car and the second customer is an elderly couple who are
about to retire.
As the couple want to move into their first house and they also need a bigger second hand car and they
have a child also. Loans are offered from £7,500 to £20,000 depending on the bank it may be less or
more and they will have to pay interest back to the bank which may 3.5% or more or less also depending
on the bank, as the wife is returning to work this will be affordable as the option to pay back the loan is
12-60 months. This loan could be used to buy a bigger second hand car, if they do not use the entire loan
they could pay some of it back early to reduce interest or keep it for the deposit of their first home. This
loan is good for the couple, as they may not have a lot of money due to the care of their child. As they
can pay it back between 12-60 months they will have saved a good amount of money to not need the
loan. The couple could also use this loan for the deposit of their first home as that will cost more. Also as
they have a long time to pay it back they could possibly take a higher amount and use it for both the car
and the deposit of the home, which means they will have both the car and home and as the wife is going
back to work they will be able to pay it sooner.
In terms of the couple buying a home banks will pay 95% of the price of the home whereas the couple
will just need to pay 5%.This will benefit the couple seen as the wife is just going back to work, they may
not have as much money to buy the home or even pay 20%, which is why some banks such will only
want them to pay 5% and they will pay the rest back monthly, however the most a bank will want is 5-
25% at most. There is also a free valuation on the homes which some banks offer, which is an inspection
on the property and this will benefit the couple as they will not get into any problems with the home in
the future which will be costly. A loan of £5000 or more is offered to home buyers which they can use to
decorate or improve their home. Banks also help pay any legal fees concerning the property which will
save the couple more money. This mortgage scheme is good as the cost of homes is very high, the couple
will have their home by just pay 5-25% and paying the rest back monthly seeing as the wife is going back
to work and the husband is also at work the income may be enough to pay it back.
The couple could also use saving accounts to save money for the deposit of their mortgage or car. There
is many types of saving accounts, however the one that will benefit the couple will be the one where
they gain the highest amount of interest. There is interest they can gain which ranges from 0.35% to
3.00%.The saving account that will pay them 3.00% when they save money is a regular savings account.
Which means as the couple starts saving money in the account they will receive a small amount of
money for saving, which will equate to a high amount if they do not spend any of it. They could you the
interest received towards the car they want to buy or for the deposit of their home. A saving account will
benefit the couple because when they put money in there they get interest on it and it also keeps the
money safe from spending as many saving accounts do not give them a debit card to use to spend and
also they could save the money for the car and take a loan for the deposit of their home, which means
they would have less to pay back to the bank and they will have their new home immediately and the car
will come later depending on how well they save or they could save for both and the interest will be
higher.
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