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Banking.

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Presentation on theme: "Banking."— Presentation transcript:

1 Banking

2 Forms of Money

3 Money Barter Coin Notes

4 A gold reserve is the gold held by a central bank or nation intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency.

5 The physical appearance of euro banknotes is identical throughout the euro area. However, while all euro coins have a common “European" side, they also have a ‘national’ side. The common side has the same design in all the euro-area member states. The Irish national side depicts the harp. All euro coins are legal tender throughout the eurozone, irrespective of which national side the coins have. 

6 17 Member States of the European Union
use the euro as their currency Belgium Germany Estonia Ireland Greece Spain France Italy Cyprus Luxembourg Malta The Netherlands Austria Portugal Slovenia Slovakia Finland Non-participants Bulgaria, Czech Republic, Denmark, Latvia, Lithuania, Hungary, Poland, Romania, Sweden and the United Kingdom are EU Member States but do not currently use the single European currency.

7 Not in Euro Bulgaria - Bulgarian lev Czech Republic - Czech koruna
Denmark - Danish krone Latvia - Latvian lats Lithuania - Lithuanian litas Hungary - Hungarian forint Poland - Polish złoty Romania - Romanian leu Sweden - Swedish krona United Kingdom - British pound

8 Other Major currencies
Australian dollar Canadian dollar Chinese yuan Icelandic króna Indian rupee Japanese yen New Zealand dollar Russian ruble Swiss franc Turkish lira United States dollar

9 Forms of Money Currency – notes and coins Cheques Debit Cards
Credit Cards

10 Debit Cards Laser/Switch Money in the account

11 Credit Card Visa Borrowing money

12 Charge Card America express Diners Club
Type of Credit card where balance must be cleared on receipt of statement

13 Store Credit Card Arnotts Clearys Debenhams
Store credit card – like a credit card but can only use it in that store

14 Financial Agencies

15 Banks Allied Irish Bank - AIB Bank of Ireland Ulster bank
Permanent TSB – Trustee Saving Bank ACC – Agricultural Credit Company

16 Building Society EBS – education building society

17 Credit union Co – op owned and run by members

18 An Post Savings Investments AIB banking

19

20 Services

21 Bank Services Cheques – with current account Bank Draft
Standing Order – SO Direct Debit – DD Credit Transfer – CT Paypath – CT for paying wages Cards – credit cards, laser cards, ATM cards, Smart cards Night Safes ATM – automated teller machine Ebanking - Online banking

22 Savings Savings earn interest
Interest subject to DIRT – deposit interest retention tax Some An Post schemes not subject to DIRT

23 Interest on Savings Simple Interest
Compound Annual Rate (CAR) Interest Sean Carmel Y1 10% 500 50 Y2 10% 550 55 Y3 10% 605 60.50 Y4 10% 66.55 200 232.55

24 DIRT DEPOSIT INTEREST RETENTION TAX 20% tax on interest earned
Retained by bank and returned to department of finance - government Sean Carmel Y1 10% 500 50 Y2 10% 550 55 Y3 10% 605 60.50 Y4 10% 66.55 Interest 200 232.55 DIRT 20% 40 46.51 Interest after DIRT 160 186.04

25 Foreign Exchange Foreign cash Cross Border Draft Travellers cheques
Laser card Credit Card

26 Euro to Foreign Currency
Multiply by the sell Rate Foreign Currency to Euro Divide by the buy Rate

27 AIB ACC DIRT DD SO CT CAR EBS

28 Money transmission Money Transmission Cost Safety Record Cheque
Stamp duty -50c per cheque Very safe written Bank Draft €2.40 each Written SO Free on some accounts Written - Statement DD CT Written – Statement Ebanking No charge for many transactions Safe – internet risks – PIN Online Statement printable

29 - fixed amount such as a mortgage/loan
Standing Order – Use to pay an amount that stays the same Direct Debit – used to pay a bill that Differs each time such as Electricity or Phone

30 Simple Interest Q3a Simple Interest Y1 €500 x 5% 25 Y2 €500 x 5%
Total 75

31 Simple Interest Q3b Simple Interest Y1 €1500 x 8% 120 Y2 €1500 x 8%
Total 600

32 Simple Interest Q3c Simple Interest Y1 €1900 x 9% 171 Y2 €1900 x 9%
Total 1197

33 Simple Interest Formula
P = Principle sum T = Time/no. of years r = interest Rate P x T x r Example 3a: 500 x 3 x 5% =75

34 4a Compound Annual Rate CAR
Compound Annual Rate Interest Y1 €500 x 5% 25 Y2 €525 x 5% 26.25 Y3 € x 5% 27.56 Total 78.81

35 4b Compound Annual Rate CAR
Compound Annual Rate Interest Y1 €1,500 x 8% 120 Y2 € 1620 x 8% 129.60 Y3 € x 8% 139.96 Y4 € x 8% 151.16 Y5 € x 8% 163.25 Total 703.97

36 4c Compound Annual Rate CAR
Compound Annual Rate Interest Y1 €1,900 x 9% 171 Y2 € 2071 x 9% 186.39 Y3 € x 9% 203.16 Y4 € x 9% 221.44 Y5 € x 9% 241.37 Y6 € x 9% 263.10 Y7 € x 9% 286.78 Total

37 CAR formula P = Principle r = interest rate T = time P (1+ r)T

38 5a & b DIRT Interest DIRT rate DIRT 200 20% 40 800 160

39 5c, d, e, f DIRT PxTxr Interest DIRT rate DIRT 2500x1x5% 125 20% 25
180 36 4500x1x8% 360 72 5700x1x7% 399 79.80

40 John Paid a Cheque (Bank of Ireland )to Olive.
Drawer: Drawee: Payee:

41 Endorsed cheque: Dishonoured cheque:

42 4 methods a current account holder can make a payment
1. 2. 3. 4.

43 Lodgement Counterfoil
What bank teller does: Significance for current account holder:

44 Terms Explanations 1. Endorsed Cheque (a) A cheque which the drawer informs the bank not to honour 2. Stopped cheque (b) A cheque with two parallel lines on the front 3. Open Cheque (c) A cheque signed on the back by the payee 4. Blank Cheque (d) A cheque which is not crossed (e) A cheque with some of the details missing 1 2 3 4


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