3.2 Commercial Banks and 3.3 Central Banks
- Created by: Emily
- Created on: 19-10-15 18:32
3.2 Commercial Banks
Commercial banks are high-street banks.
Commercial bank activities
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Keeping money safe – you can put your money into different types of accounts.
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Current accounts are used for regular spending and paying bills
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Deposit/Savings Account is for money you save up for later. This earns a higher interest rate
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Lending money – to individuals and companies
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Loans - you borrow money for several months/years to buy something specific e.g. kitchen
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Overdrafts – the bank lets you spend more than you have in your account but expects it to be payed back soon
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Credit cards – you can choose to only pay back the money you’ve spent a bit at a time
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Mortgages – a big loan for something like a house or factory which is payed back over a long period. The bank keeps the deeds.
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Means of making payments
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Cheques
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Electronic transfers
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Credit/debit cards
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Standing orders – you tell the bank to pay the same amount to a person every month
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Direct debit – allows someone to take how much you owe them…
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