Business Basics Topic
Banking
- Read notes
- Flashcards
- Quiz
- Confident
Study focus - 3 things
- Banks help people and businesses save, borrow, pay, and receive money
- Common banking services include savings accounts, current accounts, loans, and electronic payments
- Watch out: saving money and borrowing money are opposite services
Section 1What banks do
A bank is a financial institution that handles money for people and businesses. It can keep money safe, allow payments, provide loans, and help customers manage accounts.
Section 2Accounts
A savings account is mainly for storing money and earning interest. A current account is mainly for frequent transactions, such as paying bills or receiving salary. Many Jamaican workers use bank accounts for salary deposits.
Section 3Loans and interest
A loan is money borrowed from a bank and repaid later, usually with interest. Interest can be money earned on savings or money paid for borrowing. Here's the trick: ask whether the customer is saving or borrowing.
Section 4Payment services
Banks help people pay using cheques, debit cards, online transfers, and other electronic services. These methods reduce the need to carry large amounts of cash. Keep account details safe to prevent fraud.
Examples
Tia wants to keep birthday money safe and add to it over time. Which account suits her best?
A savings account suits her best because she wants to store money and build savings.
A small shop borrows money from a bank to buy a freezer. What will the shop usually repay besides the amount borrowed?
The shop usually repays interest. Interest is the cost of borrowing money.
Now let's water it
Session runs notes to flashcards to quiz back-to-back.