Current and Deposit Accounts

 

There are different kinds of bank accounts. The most popular is the current account. It pays no interest but it has other advantages. Firstly, it enables people to keep their money in a safe place. Secondly, it allows them to withdraw it at any time. Thirdly, it provides them with a cheque book so that they do not have to carry a lot of cash.

To open a current account it is necessary to see the branch manager. He has to decide whether the applicant is likely to keep the account in credit. A current account holder can only overdraw with the manager's permission. The manager will therefore want to meet the applicant to get the necessary background information. For example, he will want to know the applicant's occupation and place of work. He will also probably want a reference from his or her employer. If, after the interview, the manager is satisfied with the applicant he will approve the application, arrange for the applicant to be given a cheque book and arrange for a monthly statement to be sent to him or her.

A deposit account is another popular account. It has advantages over a current account. First of all, it is easier to open a deposit account than a current account. There is no need to see the manager. A customer only has to fill in a form and then deposit the minimum amount of money required by the bank. The customer is then given a pass book which he must bring to the bank every time he wishes to withdraw or deposit money. The pass book is customer's record of the account. Secondly, a deposit account earns for the customer.

The bank invests the money that the customer pays in and in return, the bank pays the customer interest. The rate of interest in the UK is not fixed but it is usually between 5 – 10 %. However, a deposit account has certain disadvantages too. In the UK at the moment the maximum a customer can withdraw in one day is £ 20. Another disadvantage is that the customer receives no cheque book and therefore he cannot pay bills so easily.

 

Test

#q

Choose the best title.

#a

Bank accounts

#a

Forms of saving

#a*

Current and deposit Accounts

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text.a current account #a available money in the form of coins and notes #a to leave money with a bank #a* bank account from which money can be drawn at any time #a to take out #a to spend more money than you have in your bank account so that you owe the bank money

#q Choose the definitions corresponding to the meaning of words and word-combinations used in the text.to withdraw (money) #a available money in the form of coins and notes #a to leave money with a bank #a bank account from which money can be drawn at any time #a* to take out #a to spend more money than you have in your bank account so that you owe the bank money

#q Choose the definitions corresponding to the meaning of words and word-combinations used in the text.cash #a* available money in the form of coins and notes #a to leave money with a bank #a bank account from which money can be drawn at any time #a to take out #a to spend more money than you have in your bank account so that you owe the bank money

#q Choose the definitions corresponding to the meaning of words and word-combinations used in the text.to deposit #a available money in the form of coins and notes #a* to leave money with a bank #a bank account from which money can be drawn at any time #a to take out #a to spend more money than you have in your bank account so that you owe the bank money

#q Choose the definitions corresponding to the meaning of words and word-combinations used in the text.to overdraw #a available money in the form of coins and notes #a to leave money with a bank #a bank account from which money can be drawn at any time #a to take out #a* to spend more money than you have in your bank account so that you owe the bank money

#q

Choose the best answer to complete the following sentence: The pass book is...

#a

a document in which a bank records money dealings of a customer

#a*

a record of the account

#a

a list of things bought and their price

#q

Choose the best answer to complete the following sentence: The rate of interest in the UK is not fixed but it is usually between...

#a

15-20%

#a*

5-10%

#a

2-3%

#q

Choose the best answer to complete the following sentence: A current account is...

#a*

one which pays no interest

#a

one in which savings are held

#a

one which earns interest

#q

Choose the best answer to complete the following sentence: A deposit account is...

#a

one from which withdraws can be made by cheque

#a*

one which earns interest

#a

one from which regular payments are made

#q

Choose the best answer to complete the following sentence: In the UK at the moment the maximum a customer can withdraw in one day is …

#a*

£ 20

#a

£ 50

#a

£ 100

 

Match the phrases.

 

To open a current account …	… he will approve the application and arrange for the application to be given a cheque-book.
The manager will want to meet the applicant …	… it is necessary to see the branch manager.
If, after the interview, the manager is satisfied with the applicant …	… every time he wishes to withdraw or deposit money.
The customer is given a pass book which he must bring to the bank …	… to get the necessary background information.
The bank invests the money that the customer pays in and in return …	… the bank pays the customer interest.

#q

Read the text again and say if this statement is true or false. Justify your answers. The current account provides customers with a cheque book so that they do not have to carry a lot of cash.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. Justify your answers. Interest is paid by the bank on both current and deposit accounts.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. The rate of interest on deposit accounts is fixed.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. It is easier to open a current account than a deposit account.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. It is easier to get money out of a deposit account than it is from a current account.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. Withdrawals are made from a deposit account by cheque.

#a

true

#a*

false

 

 

For economists

Text 1

 

The way in which a bank is organized and operated is determined by its objectives and by the type of economy in which it conducts its business. A bank may not necessarily be in business to make a profit. Central banks, for example, provide a country with a number of services, while development banks exist to increase the economic growth of a country and raise the living standard of its population. On the other hand, the aim of commercial banks is to earn profits. They therefore provide and develop services that can be sold at a price that will yield a profit.

A commercial bank which provides the same range of services year after year is less likely to be successful than one which assesses changes in the demand for its products and which tries to match products to its customer’s needs. New services are constantly being introduced and developed by commercial banks, and (the full-service philosophy of many banks means that they are akin to financial supermarkets, offering a wide variety of services. However, not every bank may want to offer every kind of financial service.

Many banks offer a combination of wholesale and retail banking. The former provides large-scale services to companies, government agencies and other banks. The latter mainly provides smaller services to the public. Both types of banking have three essential functions which are:

- deposits

- payments

- credits

These three functions are the basis of the services offered by banks. They make it possible for banks to generate profits and to achieve their operating aims.

Several factors have combined to make banking an international business. These include the growth of multinational companies and of international capital markets, the increased competition between the banks themselves, and important improvements in communications and transportation. The major banks of the world have established extensive international operations by acquiring banks in other countries, by extending their own branch network abroad and by establishing correspondent relationships with foreign banks so as to develop profitable joint operations. The operations of these major commercial banks are dynamic and rapidly changing, and their organization is of a global nature.

 

 

Test

#q

Choose the best title.

#a

Functions of banks

#a

Bank services

#a*

Bank organization

#q

What is the first paragraph of the text about?

#a*

bank objectives

#a

types of banks

#a

bank organization

#q

Choose the best answer to complete the following sentence: Development banks exist...

#a

to provide services to the public

#a

to hold the government's accounts

#a*

to increase the economic growth of a country

#q

Choose the best answer to complete the following sentence: The aim of commercial banks is...

#a*

to earn profits

#a

to arrange short-term borrowing of money for government

#a

to advise other banks

#q

Choose the best answer to complete the following sentence: Wholesale banking provides large-scale services to...

#a

the public

#a

small businesses

#a*

companies, government agencies and other banks

#q

Choose the best answer to complete the following sentence: Several factors make banking an international business. These include:

#a

the economic growth of countries

#a*

the growth of international capital markets

#a

the high living standard of population in many countries

#q

Choose the best answer to complete the following sentence: The way in which a bank is organized and operated is determined by...

#a

the government of the country

#a

its customers

#a*

its objectives

#q

Choose the best answer to complete the following sentence: The full-service philosophy of many banks means that they are akin to...

#a

financial intermediaries

#a

financial houses

#a*

financial supermarkets

#q

Choose the best answer to complete the following sentence: Retail banking provides smaller-scale services to...

#a

companies

#a

other banks

#a*

the general public

#q

Choose the best answer to complete the following sentence: The major banks of the world have established extensive international operations by...

#a

developing new bank services

#a*

acquiring banks in other countries

#a

changing its structure

Match the phrases.

#q

Match the phrase. A bank may not necessarily be in business to make …

#a

… deposits, payments, credits

#a

… of a global nature

#a

… their operating aims

#a*

… a profit

#a

… retail banking

#q

Match the phrase. Many banks offer a combination of wholesale and …

#a

… deposits, payments, credits

#a

… of a global nature

#a

… their operating aims

#a

… a profit

#a*

… retail banking

#q

Match the phrase. Both types of banking have three essential functions: …

#a*

… deposits, payments, credits

#a

… of a global nature

#a

… their operating aims

#a

… a profit

#a

… retail banking

#q

Match the phrase. These functions make it possible for banks to achieve …

#a

… deposits, payments, credits

#a

… of a global nature

#a*

… their operating aims

#a

… a profit

#a

… retail banking

#q

Match the phrase. The operations of major commercial banks are rapidly changing, and their organization is …

#a

deposits, payments, credits

#a*

… of a global nature

#a

… their operating aims

#a

… a profit

#a

… retail banking

#q

Read the text again and say if this statement is true or false. Development banks exist to increase the economic growth of a country and raise the living standard of its population.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. Commercial banks develop services that can be sold but they won't yield a profit.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. New services are rarely introduced and developed by commercial banks.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. The growth of multinational companies and of international capital markets contributes to making banking an international business.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. The major banks of the world don't acquire banks in other countries.

#a

true

#a*

false

 

Text 2

 

The Bank of England does business with many international institutions and central banks of many countries keep their accounts there. It advises banks, companies and governments. This Bank has three main functions in England.

It holds the central accounts of the Government - the accounts of HM chequer and of the National Loans Fund. Any money received or paid out by the government goes through these accounts. It arranges short-term borrowing of money for the government. It manages the government's stocks. There are nearly 200 types of stock with a nominal value of 20.000.000.000. The Bank issues the stocks, keeps a list of the three million stockholders and pays out the dividends. It manages the Exchange Equalization Account. This means making sure the exchange value of sterling does not change too much. It controls the country’s reserves of gold and foreign currencies and administers the Exchange Control Regulations.

It acts as the principal bank for all the other banks, e.g. Lloyds, Barclays, Midland. They all keep a large amount of their cash in tine Bank of England. It has close relations with the Committee of London Clearing Banks and the British Banker's Association, the Stock Exchange and the insurance industry.

Only the Bank of England can issue notes. Until 1931 it was possible to take a bank-note to the Bank of England and exchange it for the same amount of gold. Nowadays the value of a bank-note does not depend on gold, but on a complicated system of government securities.

 

Test

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. an account

#a

British currency

#a

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a

to give money for the part of the profit

#a*

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. currency

#a

British currency

#a

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a

to give money for the part of the profit

#a

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a*

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. value

#a

British currency

#a

money borrowed by a government at a fixed rate of interest

#a*

the monetary worth of something

#a

to give money for the part of the profit

#a

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. to pay out dividends

#a

British currency

#a

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a*

to give money for the part of the profit

#a

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. to issue

#a

British currency

#a

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a

to give money for the part of the profit

#a

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a*

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. insurance

#a

British currency

#a

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a

to give money for the part of the profit

#a

record of money received and paid out by a bank

#*

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. stocks

#a

British currency

#a*

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a

to give money for the part of the profit

#a

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the definition corresponding to the meaning of words and word-combinations used in the text. sterling

#a*

British currency

#a

money borrowed by a government at a fixed rate of interest

#a

the monetary worth of something

#a

to give money for the part of the profit

#a

record of money received and paid out by a bank

#a

contract by which a company agrees to pay money to a person who suffers a loss in return for receiving a small sum of money

#a

country’s unit of money

#a

to give out for use, to put into circulation

#q

Choose the best answer to complete the following sentence: The Bank of England is...

#a

one of the development banks of the UK

#a*

he central bank of the UK

#a

one of the state banks of England

#q

Choose the best answer to complete the following sentence: The Bank of England advises...

#a

individuals

#a

small businesses

#a*

banks, companies and governments

#q

Choose the best answer to complete the following sentence: It controls the country's...

#a

markets

#a

companies

#a*

reserves of gold

#q

Choose the best answer to complete the following sentence: Nowadays the value of a bank-note does not depend on gold but on

#a

the economic situation in the country

#a

the amount of capital reserves

#a*

the complicated system of government securities

#q

Choose the best answer to complete the following sentence: Central banks of many counties keep their accounts in...

#a

Trustee Savings Banks

#a

National Giro and Financial Houses

#a*

the Bank of England

#q

Choose the best answer to complete the following sentence: The Bank of England arranges short-term borrowing of money for...

#a

the Queen

#a*

the Government

#a

large companies

#q

Choose the best answer to complete the following sentence: Only the Bank of England can issue...

#a

securities

#a

shares

#a*

notes

#q

Match the phrase. The Bank of England does business with …

#a

… gold and foreign currencies

#a

… does not change too much

#a*

… many international institutions

#a

… the Bank of England

#a

… the Government – the accounts of HM chequer and of the National Loans Fund

#q

Match the phrase. It holds the central accounts of

#a

… gold and foreign currencies

#a

… does not change too much

#a

… many international institutions

#a

… the Bank of England

#a*

… the Government – the accounts of HM chequer and of the National Loans Fund

#q

Match the phrase. The Bank of England manages the Exchange Equalization Account. This means making sure the exchange value of sterling …

#a

… gold and foreign currencies

#a*

… does not change too much

#a

… many international institutions

#a

… the Bank of England

#a

… the Government – the accounts of HM chequer and of the National Loans Fund

#q

Match the phrase. The other banks of England keep a large amount of their cash in …

#a

… gold and foreign currencies

#a

… does not change too much

#a

… many international institutions

#a*

… the Bank of England

#a

… the Government – the accounts of HM chequer and of the National Loans Fund

#q

Match the phrases. The Bank of England controls the country’s reserves of …

#a*

… gold and foreign currencies

#a

… does not change too much

#a

… many international institutions

#a

… the Bank of England

#a

… the Government – the accounts of HM chequer and of the National Loans Fund

#q

Read the text again and say if this statement is true or false. The Bank of England has three main functions in England.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. It is possible to take a banknote to the Bank of England and exchange it for the same amount of gold.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. The Bank of England doesn't pay out the dividends to its stockholdres.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. British banks never keep their cash in the Bank of England.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. The Government has the accounts in the Bank of England.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. Nowadays the value of a banknote depends on a complicated system of government securities.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. What is the last paragraph of the text about?

#a

The Bank of England issues stocks.

#a

Many Banks of England keep a large amount of their cash in the Bank of England.

#a*

Only the Bank of England can issue notes.

 

Text 3

Investment

 

If you do not spend all your income-your monthly salary or weekly wages with any other earning such as fees, interest or dividends - you will have some money left over to save. What can you do with this money? You can simply put it in a box under the bed of course but it is more sensible to make your money earn more money for you. To do this, you can put it into a deposit account at the Post Office. In this way it will earn interest for you. Rates of interest fluctuate but your money is secure - except of course against inflation, which reduces the value and purchasing power of money in the economy as a whole.

Another thing you can do is to invest in a building society where the interest rate may be a little better than in a bank. A building society is a firm which lends money to people who want to buy property. If you want to buy your own house, for instance, you take out a mortgage with the society and repay the loan at, say, 10 % per annum over 30 years.

In addition you can invest directly in a commercial company by buying shares in it. Once or twice a year you will receive a statement from the company and if the company has done well, a cheque. This money is your dividend and it increases if the company's profits rise and decreases if they fall. The center of stockbroking (buying and selling stocks shares) is the Stock Exchange in the City of London.

 

Test 3

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text. invest

#a

money given for a limited period of time and which will be repaid

#a

one part of the capital of a company

#a

price paid for the use of money

#a*

to use money in order to earn interest or make a profit

#a

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a

financial institution which pays interest to small depositors and lends money for housebuying

#a

organized market where stocks and shares are bought and sold

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text. interest

#a

money given for a limited period of time and which will be repaid

#a

one part of the capital of a company

#a*

price paid for the use of money

#a

to use money in order to earn interest or make a profit

#a

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a

financial institution which pays interest to small depositors and lends money for housebuying

#a

organized market where stocks and shares are bought and sold

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text. inflation

#a

money given for a limited period of time and which will be repaid

#a

one part of the capital of a company

#a

price paid for the use of money

#a

to use money in order to earn interest or make a profit

#a*

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a

financial institution which pays interest to small depositors and lends money for housebuying

#a

organized market where stocks and shares are bought and sold

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text. loan

#a*

money given for a limited period of time and which will be repaid

#a

one part of the capital of a company

#a

price paid for the use of money

#a

to use money in order to earn interest or make a profit

#a

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a

financial institution which pays interest to small depositors and lends money for housebuying

#a

organized market where stocks and shares are bought and sold

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text. share

#a

money given for a limited period of time and which will be repaid

#a*

one part of the capital of a company

#a

price paid for the use of money

#a

to use money in order to earn interest or make a profit

#a

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a

financial institution which pays interest to small depositors and lends money for housebuying

#a

organized market where stocks and shares are bought and sold

#q

Choose the definitions corresponding to the meaning of words and word-combinations used in the text. Stock Exchange

#a

money given for a limited period of time and which will be repaid

#a

one part of the capital of a company

#a

price paid for the use of money

#a

to use money in order to earn interest or make a profit

#a

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a

financial institution which pays interest to small depositors and lends money for housebuying

#a*

organized market where stocks and shares are bought and sold

#q

a building society

#a

money given for a limited period of time and which will be repaid

#a

one part of the capital of a company

#a

price paid for the use of money

#a

to use money in order to earn interest or make a profit

#a

rise in the general level of prices attributed to increases in production costs or an increase in the money supply

#a*

financial institution which pays interest to small depositors and lends money for housebuying

#a

organized market where stocks and shares are bought and sold

#q

Choose the best answer to complete the following sentence: A building society is a firm which...

#a

builds houses

#a*

lends money to people

#a

pays out dividends

#q

Choose the best answer to complete the following sentence: You can invest directly in a commercial company by...

#a*

buying shares in it

#a

putting some money in it

#a

making a personal loan

#q

Choose the best answer to complete the following sentence: Once or twice a year you will receive a statement from the company and if the company has done well, …

#a

a bill

#a*

a cheque

#a

a premium share

#q

Choose the best answer to complete the following sentence: The center of stockbroking is the Stock Exchange in the city of...

#a

New-York

#a

Brussels

#a*

London

#q

Choose the best answer to complete the following sentence: You can put your money into a deposit account at the Post Office. In this way it will...

#a

be safe

#a*

earn interest

#a

be exchanged for cheques

#q

Match the phrase.If you do not spend all your income … #a … the company’s profits rise. #a* … you take out a mortgage with the society and repay the loan over 30 years. #a … inflation, which reduces the value and purchasing power of money in the economy as a whole. #a … you will have some money left over to save. #a … the interest rate may be a little better than in a bank.

#q Match the phrase.Your money is secure - except of course against … #a … the company’s profits rise. #a* … you take out a mortgage with the society and repay the loan over 30 years. #a … inflation, which reduces the value and purchasing power of money in the economy as a whole. #a … you will have some money left over to save. #a … the interest rate may be a little better than in a bank.

#q Match the phrases.If you want to buy your own house … #a* … the company’s profits rise. #a … you take out a mortgage with the society and repay the loan over 30 years. #a … inflation, which reduces the value and purchasing power of money in the economy as a whole. #a … you will have some money left over to save. #a … the interest rate may be a little better than in a bank.

#q Match the phrase.Your dividend increases if… #a … the company’s profits rise. #a* … you take out a mortgage with the society and repay the loan over 30 years. #a … inflation, which reduces the value and purchasing power of money in the economy as a whole. #a … you will have some money left over to save. #a … the interest rate may be a little better than in a bank.

#q Match the phrase.You can invest in a building society where … #a* … the company’s profits rise. #a … you take out a mortgage with the society and repay the loan over 30 years. #a … inflation, which reduces the value and purchasing power of money in the economy as a whole. #a … you will have some money left over to save. #a … the interest rate may be a little better than in a bank.

#q

Read the text again and say if this statement is true or false. Justify your answers. It is more sensible to put your money in a box under the bed than to put it into a deposit account at the bank.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. Rates of interest are always stable.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. Once or twice a year you will receive a statement from the company and a cheque.

#a*

true

#a

false

#q

Read the text again and say if this statement is true or false. Justify your answers. If you want to buy a house, you take out a mortgage with the society and repay the loan at 30 % per annum over 5 years.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. The center of stockbroking is the Bank of England.

#a

true

#a*

false

#q

Read the text again and say if this statement is true or false. Justify your answers. What is the last paragraph of the text about?

#a

One can put his money into a deposit account at the Post Office.

#a*

One can invest in a commercial company.

#a

One can put his money in a box under the bed.

 

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