Term
| Standard Bank Account: This type of account provides full day-to-day banking facilities e.g. cheque book, debit card, easy access to your money and an authorised overdraft facility. |
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Definition
Advantages:
-No charges on credit balances
-Offers the wide range of banking facilities required.
Disadvantages:
-Possibility of high interest charges on overdrafts.
-standard features only and no additional benefits are available. |
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Term
| Basic Bank Account: This account offers limited features and would be typically held by a person with no credit history in the UK or a poor credit history. |
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Definition
Advantages:
-available to customers with a low credit rating.
-Offers an easy first step to gaining access to basic banking features e.g. paying in and withdrawing money.
Disadvantages:
-Limited facilities can prove an inconvenience e.g. paying in and withdrawing money.
Disadvantages:
Limited facilities can prove an inconvenience e.g. no debit card.
-May take time to improve credit rating in order to progress to a standard account. |
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Term
| Student: These are designed to assist young people and students to become prudent with personal finances. They may come with bonus features, such as interest free overdraft facilities |
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Definition
Advantages:
-Low deposits required - in some cases paying in a student loan is sufficient.
-Incentives and freebies can be particularly useful e.g. free rail cards.
Disadvantages:
-Low interest on credit balances compared with a standard current account
-Overdraft facilities could encourage overspending. |
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Term
| Packaged Premium: This type of account usually has an annual fee or additional charge in return for offering extra incentives. These benefits can vary but may include offers such as discounted home insurance, no fee overdraft, and premium access to popular event tickets. |
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Definition
Advantages:
-It is often cheaper than buying all the additional benefits separately.
-No charges on credit balances
Disadvantages:
-The value of the incentives on offer is only worthwhile if they meet the needs of the customer and are used.
-Additional monthly charges are often applied. |
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