Most of us need a bank account or building society account to help us manage our money on a day to day basis. Here are some useful English words to talk about banking.
There is a bank for everyone. There are famous High Street banks with branches all over the world. There are ethical banks, which only invest in products that they consider to be morally sound. There are Islamic banks that operate according to Sharia law, and there are microfinance banks designed to help those with very low incomes.
But do you know your Direct Debit from your Bank Identifier code, just two of the specialist phrases associated with the banking industry?
First the basics: a ‘current account’ is a place to keep your money that allows you to take it out when you need it. It usually comes with a debit card that you can use to get money from your account anywhere in the world via an ‘ATM’, automated teller machine, which is also known as a ‘cash point’.
A ‘savings account’ will provide a small amount of interest on your savings, but your money may be more difficult to access.
If you need more money than you have saved, then you might need to borrow money from your bank in the form of a ‘loan’ or an ‘overdraft’ on your account. When you pay the money back to the bank you have to give them ‘interest’. The loan to buy a house, for instance, is called a ‘mortgage’ and can be taken out over many years. The short form ‘APR‘ stands for annual percentage rate, and it is the percentage the bank makes you pay in interest when you borrow money from them, calculated over a period of one year.
A ‘credit card’ allows you to pay for goods and services by borrowing money. If you pay the money back promptly you do not get charged interest, but if you pay back later you will have to pay it. Credit cards can be useful as they can provide ‘consumer protection’ against loss, for instance if you buy a flight and the airline then stops operating.
You can pay bills using your bank account via a ‘direct debit’ – which is when the payee tells their bank to collect money from your account or through a ‘standing order’ when you, the payer, tells your bank to regularly pay money to the payee.
It is also easy to ‘transfer’ money between bank accounts. If you bank via the internet, this can be done at the click of a button. But arranging to get paid from another country can be more complicated as you will need a ‘swift code’, which is a form of ‘BIC’ (or bankers identification code), to show the country and location of your bank.
To help you keep track of all the ‘debits’ (money out) and ‘credits’ (money in) banks issue a ‘bank statement’.
image: Philip Taylor PT