B1: Features of financial institutions

What is a financial institution?

An organisation that provides financial services such as banking, lending, saving or insurance.

What is the Bank of England?

The UK's central bank, responsible for monetary policy and helping maintain financial stability.

What is a commercial bank?

A financial institution offering services such as current accounts, savings accounts, loans and mortgages.

What is a building society?

A financial institution owned by its members that mainly provides savings accounts and mortgages.

What is a credit union?

A member-owned financial cooperative that provides savings and loans.

What is National Savings and Investments (NS&I)?

A government-backed savings organisation offering products such as Premium Bonds.

What is an insurance company?

An organisation that provides financial protection against specified risks in return for premiums.

What is a pension provider?

An organisation that manages pension schemes and retirement savings.

What is a pawnbroker?

A lender that provides loans secured against valuable possessions.

What is a payday lender?

A lender that provides short-term, high-cost loans.

What is one advantage of commercial banks?

They provide a wide range of convenient financial services.

What is one disadvantage of commercial banks?

Some accounts and services may involve fees and charges.

What is one advantage of credit unions?

They may provide accessible and affordable borrowing to their members.

What is one disadvantage of credit unions?

Their services and eligibility may be more limited than larger banks.

What is one advantage of NS&I?

Eligible savings products are backed by HM Treasury.