HND--个人理财答案.doc

1. Definition: A direct debit is an authorization from a customer to his bank to debit their account on the instruction of a specified payee, i.e. the party due the sum of money.The difference between standing order and direct debit is that the payer authorizes the payee to instigate the debit to the account. It does this by advising the bank of amount.The amounts can be fixed or variable and is a convenient method for paying bills where the amount might be subject to alteration e.g. electricity or gas bills.If an error occurs payment by BACS transfer system for unified payment.Benefits for both parties:customer: transfer money automatically, they payer will not forget to pay. do not need cash or cheque, cash is easy to be lost and cheque is too slowly for the payer. it is very convenient and is a cheaper methods.Originator: reduce cash handing cost and reduce security risk. funds are transferred quickly, easier and more convenient to receive payment from customer. also it has controlling power for payment.2. Definition: The individual Saving Account is an account where interest and gains made on capital is not taxed at source. Features: available to savers aged 16 or over. ISAs are available to UK residents.When it was issued the first year limit was set at 7,000. There are two components within ISA. Cash ISA Stocks and shares ISA. Investment in all two components of ISA can be made by placing funds with one provider, known as a “Maxi ISA”. Investments in stocks and shares ISA are also “Maxi ISA”. Investment in the two components but with different providers is known as “Mini ISA”. Interest on ISA accumulates gross, i.e. without any liability to tax. 5,0001,000.3. Fixed Interest Savings Certificates (provided by National Saving Investment) provide savers with a tax-free return and offer guaranteed interest rates over a fixed term.Features: lump sum investments, exempt from UK Income Tax and Capital Gains Tax. Savings of between 100 and 150,000 can be made in each issue. Savers can make withdrawal before the end of the 2 or 5 years term but this will result in a lower rate of return. No interest is paid if cash in during the first year. This is low risk and can have returns.4. Mortgage types: There are basically only two methods of repaying a loan against which a property has been secured as a mortgage:(1)Capital and interest repayment method (2)Interest only repayment method.Definition of Capital and Interest Mortgages: A capital and interest repayment mortgage facility is one that requires the borrower to repay a part of the capital borrowed and in interest payment charged on that capital each time a payment (instalment) is made. Interest is paid more in the beginning, and then capital is more. Features: the title to the property will be returned to the borrower. capital and interest mortgages offer no investment opportunities. capital and interest can be sure that their loan will be repaid in full at the end of the mortgage term. the monthly repayment is less certain as this in influenced by the interest rate charged by the lender. .5. Definition: Term assurance polices are the most common and cheapest assurance contracts, and the oldest types of policies in existence. They need to pay for mortgage in case of the worst things happening, so term assurance is needed. Features:suit for mortgage in case of the borrower diedthe terms can be chosepolicies can be arranged in more than one namepayment of benefit will arise on the death of the first party, or if preferred, the last death the most common and cheapest. The premiums payable of term assurance policies depend on various benefit.6. Home contents insurance :contents insurance protects moveable items within the home against:Features of contents insurance: fire or smoke damagelighting, explosion and earthquakeriot or civil commotion, strikes, labour disputes or political disturbancestheft or attempted theft damaging the propertymalicious acts of vandalismstorms or floodswater or oil escapesaccidental damage to TVs, radios, aerials, computers, VCRs etcaccidental breakage of mirrors, moveable ceramic hobs, glass tops to furniture and fixed glass in furnituretemporary accommodation costshousehold removal damage e.g. covering against damage done to property by removal firmsloss of keysfrozen foodlegal liabilities etc. Buildings Insurance cover various types of civil, industrial and utility construction projects, including roads, dams, bridges, etc., in the construction process due to natural disasters or accidents caused by all the losses.We can combine with the Home contents and Buildings Insurance to protection the Property Insurance.7. Definition: Government Fixed Interest Securities are long-term loans procured by the UK government to raise funds for capital expenditure. UK government never default, they have aFeatures: fixed rate of interestgilts are liquidity, which are negotiable in secondary marketthere are many types of giltsinterest payments on gilts are received without tax being deducted (paid gross). However they are subject to income tax so the taxpayers must declare them on their tax returns. Non-taxpayers need take no actiongilts are free of capital gains taxprice depends on the supply and demand of gilts, interest rises, and price of gilts decrease. Interest payments on gilts are received without tax being deducted.However they are subject to income tax so the taxpayers must declare them on their tax returns. Non-taxpayers need take no action.Gilts are free of capital gains tax so if an investor buys gilts and sells them at a higher price there is no further tax liability.8. Pension SchemeOccupational Pension Schemes are sometimes known as Employers Pension Schemes, or Contracted Out Pension Schemes.Features of OPS:OPS can be defined benefits or defined contributions.They are operated and run by employers,or by agents for the employers.They provide retirement tax efficient benefits for eligible employees in a tax efficient way.The scheme must meet the minimum requirements of the Inland Revenue to achieve approval status.And it must also adhere to maximum benefit criteria.Defined Benefit Schemes are also known as Final Salary Schemes. There are two definitions of final salary:Salary in any one of the last five years of employment ,or annual average of total salary including benefits over any 3 or more consecutive years in the ten years period before retirement.Formula for Final Pension=1/nth x Y x F (where nth = accrual rate, Y=number of years in service, and F = final salary) Final Salary:make sure benefit for employeesemployees can taking their pension in full, or opt for a reduced pension and a tax-free lump sumemployer Schemes may be contributory, both the employer and the employee pay towards the cost of the pensionsome can be non-contributory, the employer making all of the contributions on behalf of the employeemake sure the employee can have defined benefit, the risk is open-endedmost schemes guarantee payment of a fraction of the final salary, usually 1/60th or 1/80th for each year of service completed by the employee.Defined Contribution Schemes are also known as Money purchases Schemes. Money purchase:benefits payable at retirement are neither guaranteed nor known in advancethe employer cannot make sure the future insurancebenefits are fully dependent on the value of the investment fund at the point of retirementonly the levels of contribution are known with any certainlythe schemes often feature a tiered rate of contribution: (a) The younger the employee, the lower the percentage of salary he will be allowed to contribute to the scheme. (b) The employers contributions levels are usually also lower for younger employees. (c) As the employee gets older the level of contribution usually increases. the employer has lower risk, so it is closed-ended.The difference between DBS and DCS: (1)The name is different.(2)The risk of DBS is big, but the DCSs risk is little.(3)Repayment:DBS