4th ESO ECONOMICS

T.7 MONEY AND ITS FORMS

1.-MONEY:

Money is defined as ANY MEANS OF PAYMENT GENERALLY

ACCEPTED by society.
1.1. FUNCTIONS OF MONEY.
1. PAYMENT METHOD. As an intermediary that facilitates trade and
the specialization in production.
2. VALUE DEPOSIT. Allows to save and maintain wealth,
although the rise in prices (inflation) reduces its value.
3. COMMON UNIT OF ACCOUNT (OR MEASURE). To measure the value of
the b. and services, as it admits multiples and divisors.
1.2.-FIDUCIARY MONEY.
Current money does not base its value on being exchangeable for gold.
another metal.
Fiat money is made up of:
LEGAL MONEY: banknotes and coins in legal tender (issued by the
central banks). Spain is one of the EU countries that has the euro
as a currency controlled and issued by the European Central Bank.
BANK MONEY: It only exists virtually because it is in the bank.
bank accounts and credit cards (can be used to pay).
deals with virtual money

2.-BANK ACCOUNTS:
In the MONEY MARKET, savers keep their money in banks and
boxes and these institutions lend them to those who need financing.
The products where most of the money is kept are:
1. DEMAND DEPOSITS. High liquidity, low profitability.
2. TERM DEPOSITS. Lower liquidity, higher profitability
2.1. DEMAND DEPOSITS.
They are called on demand because the money can be accessed in a way
immediate.
Bank ACCOUNTS are deposits of money around which
they carry out the usual banking operations.
Cash deposits or withdrawals (teller).
Direct debit of bills (water, electricity, phone…)
Money transfers to other accounts (for family or purchases)
Use of ATMs to withdraw money.
Payment with debit cards.
Payment of loan installments.
Contributions to pension plans.

Demand deposits can be:

CURRENT ACCOUNTS SAVINGS ACCOUNTS

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 The money can be disposed of. There is no checkbook, but rather
by checks. a booklet or notebook.
The interest received is lower. The interest received is a little
Companies usually use it. mayor
Families usually use it.
A special type is the NOTEBOOKS
FOR YOUNG PEOPLE under 25 years old

DEMAND DEPOSITS
ADVANTAGES DISADVANTAGES
Easy hiring Very low profitability
Total liquidity Maintenance fees (For being
headline
Detailed information about Management fees (Per
movements reflect the movements
I use ATMs (and cards to pay) Commissions for operations (Do
transfers, use of ATMs,
checks...)

2.2.- DEPOSITS OR TIME FIXED IMPOSITIONS

They are called fixed-term because you cannot access the money during the
duration of the term (if applicable, there is a penalty).
ADVANTAGES: They offer a slightly higher interest than sight deposits.
DISADVANTAGES: Not having money. Transactions cannot be made.
with them: payment of invoices, transfers

2.3.-ONLINE BANKING:

New technologies have led to another way of operating with banking.

through computers and mobile phones.

ADVANTAGES INCONVENIENCES
Comfort (from home, work, or Distrust of email messages
outside...) electronic
24-hour access, including holidays. Change the code periodically
Time saving (without queues and easier access
quickly) Store cards in a safe place,
Cheaper (they charge less keys...
commissions, when saving personally) Never give passwords or data
Transparency (detailed personal information when requested by
by screen) SMS, fax,…
Personalized offers and services Protect mobile access
Avoid the visibility of your card to
third parties.
Use and update automatically

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 antivirus and antispyware.
Update the browser
Install a firewall
Take additional precautions in
public or shared computers.

3.- BANKING RELATIONS:

In every product contracted between the bank and the client, there are certain rights and
obligations for each party.
BANK ACCOUNT. It is a contract between the bank and the client through which the
first, it holds (keeps) the money for the second and informs him about the
movements of the same in exchange for the agreed commissions.
RIGHTS AND OBLIGATIONS OF A ACCOUNT HOLDER
BANKING
RIGHTS OBLIGATIONS
1.- Receive a copy of the contract 1.-Pay on time the
2.-Receive all information about agreed commissions
the operations and the products 2.-In case of overdraft, return
offered money, interest, and fees
3.-Receive documents to facilitate the data of
liquidation identification requested by the
4.-Receive the bank interests.
remuneration del deposit) 4.-If you have different accounts in the
corresponding. (the bank, the negative balances of
Modifications of interests, some of which will be compensated.
to be communicated subtracting from the balance of another.

3.2. INFORMATION AND NEGOTIATION

Before hiring a product with a bank (account, pension fund...)
It is advisable to get informed about these conditions (fine print)
COMMISSIONS AND OTHER EXPENSES Some banks do not charge commissions.
They may require a minimum balance to avoid fees.
COSTS OF OPERATIONS AND OVERDRAFT If incurred
negative balances incur interest and fees, in some cases very
high. Operations where they can charge commissions: transfers, payment
taxes, check collection, online banking...
COST OF AVAILABLE CARDS Some banks charge, others do not.
Also the cost of online banking.

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GOOD ADVICE:
TIPS ON INFORMATION FOR:
BANKING PRODUCTS AND SERVICES Request informational brochures In
mortgage loans, request a "binding offer" (document for
written with the conditions
FOR INVESTMENTS (FIXED INCOME, STOCKS...) Written information about
characteristics, risks, and costs
FOR LIFE INSURANCE Request document with the terms.
IN GENERAL Compare the features of various banks and NEGOTIATE
to obtain the best conditions

3.3. COMPLAINTS
Banks have a CUSTOMER SERVICE available to which you can
They must direct all complaints and disagreements.
If they do not respond to the claim within 2 months, or the response does not
we are satisfied, the next step is to claim from the BANK OF SPAIN either
by telepathy or in writing on paper

4. THE CARDS

They are PAYMENT METHODS on plastic support, which can be issued by

a financial entity or a business.

The main types of cards are:

BANK CARDS: They are issued by a financial institution and can be used
to make a purchase or withdraw money.

NON-BANK CARDS: They are exclusively used for purchasing at the

commercial establishments that issue them.

There is another type of card called LOYALTY cards, which serves to

accumulate points, but not to pay.

4.1. BANK CARDS.

DEBIT CARDS Withdrawing from the ATM or paying with them is equivalent to using the
account money is deducted from the balance immediately.

CREDIT CARDS Allow you to pay or withdraw money up to a limit without

need to have balance. The money must be returned later.

There are 2 modalities:

MONTHLY PAYMENT FOR THE TOTAL (IN CASH) All payments of a

they are charged to the account the following month (interest-free)

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 DEFERRED PAYMENT The payment can be divided into installments, paying
interests

WALLET CARDS (OR PREPAID) Rechargeable cards that allow you to pay
only up to a limit

VIRTUAL CARDS Like wallets, but they are only valid for
buy online. They are not physical (they are just a number, PIN, and date of
expiration