Topic 4 : Know the features of a current account

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 )  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 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