Lecture notes
Lecture notes Unit 3 - Personal and Business Finance
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Unit 3 – personal and business finance 23/09/22Current accounts
-current accounts is an account with a bank that is designed for frequent use. Money can be
paid and withdrawn on a daily basis without the need to give notice. most people will use a
current account to get there wage paid into there
Some features of current accounts are
Interest rates paid on a positive balance
Overdraft
Interest rates charged on an negative balance
Charges on unauthorised overdrafts
Additional incentives to use a current account
Can make cash withdrawals
Offer an overdraft limit
Issued with cheque book
types of current account
-standard this is a normal account offered to customers with a reasonable credit rating it
includes standard features such as the ability to pay and withdraw money, cheque book,
debit card, interest payments on a positive balances and pre-agreed overdraft limit.
-packaged. Premium this account offers additional features to a standard account, for
example car and house insurance for free on certain transactions’ bank may have additional
charges for these accounts so it is important that you check whether you are being offered a
good deal or not this comes with a fee per month.
-basic this account offers only limited features designed for those customers who may other
ware find it difficult to open a bank account due to poor credit ratings. A basic account will
not offer an overdraft and will not pay interest on positive balances.
Customers are seen as high risk and are therefore not offered credit
Still pay money and take money out if they have sufficient funds
-student this account is designed to meet needs for students common features are
overdraft but these have limits and incentive to join the bank. For example free rail card or
cash. Banks are keen to attract learners because once a young person has joined a bank they
will tend to stay with that bank for life
Proceed to pay university tuition fees
Types of accounts advantages disadvantages
standard Widely available Limited addition benefits
Overdraft facility Charges on overdraft,
Range of services bounced cheques etc. can
be high
Packaged, premium Range of services Often charge additional fees
Additional benefits generic rather than tailored
Ease of coordinating towards individuals needs
different aspects on e.g. travel insurance may
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