PRINCIPLES OF MONEY

Topic 4 : Know the features of a current account

LEARNING OUTCOMES

After completing this topic, you will be able to :

define a “current account”;

explain what is meant by “sort code” and “account number”;

list the usual items that you will get when you open a current account and explain the features of each.

Current Account It is a type of bank account

It lets you take money out to pay for different things

You are usually given a debit card and a cheque book

You may be given an overdraft facility

Sort Codes and Account Numbers

Sort Codes identify the bank the account is with.

It relates to the specific branch you opened your account with.

Account numbers are unique to you.

Everyone has a different account number.

Anything to do with your account will have the number on it.

Sort Codes

Sometimes called “sorting codes”

Unique to the branch where you have your

account

○ Think of it as the “address” of the branch.

It is a six digit number

○ It takes the form xx-xx-xx

(for example 83-27-09)

You can tell which bank the sort code relates to by

looking at the first two digits.

Account Numbers

Unique number for each account

Important to use it carefully

○ Don’t want to put money into someone else’s

account!

Find your account number by looking at

your statement or chequebook

Activity 5A

Look at this cheque

State the sort code and account number

Activity 5A Answers

Cash Cards

Plastic cards used to take cash out, either in a branch or an ATM

Cannot be used in shops

Debit Cards

Used to make payments in shops

Most are “Chip and Pin”

Inserted into the reader

○ You are asked to enter your Personal Idenfitication Number (PIN)

Once correct, the bank is asked to pay money to the

shop from your account

Can also be used at an ATM

Chequebooks

Used to make payments to other people

Written instruction

Fewer used due to plastic cards

Some shops no longer accept them

Best way to send money securely by post

Activity 5B

Complete the worksheet

Activity 5B Answers

Statements A list of all the transactions on your account

○ All deposits and withdrawals.

Statements are usually sent to you monthly.

Online banking – you may be sent an email to tell you to view your statement online

○ Saves paper

Can get mini statements from ATMs

Always check the statement for incorrect transactions

Overdrafts A way of borrowing – you can spend more

than you have in your account.

The bank will agree the amount○ Called the “overdraft limit”

○ Using the limit is called an arranged overdraft

You may be charged a fee for using it

You may use your overdraft to buy something using your debit card, and the money is taken before your wages are paid in.

Unauthorised Overdrafts

Borrowing without the bank’s permission

If you write a cheque or use your card for more than you have or are allowed by the bank, you will be charged a fee.

Review Questions

Answers to Review Questions