Text b Bank Accounts and Cheques

Read the text quickly for the specific information that will help you to answer the following questions. For better understanding financial vocabulary consult the list of terms and expressions below the text. Then read TEXT B for the second time and answer the questions in writing.

1. What are the main types of bank account in the U.K.?

2. In what case interest is paid on the balance held in the account?

3. What do you have to do if your account is overdrawn but you need

more money to pay from your bank account?

4. What are the possible ways of protecting the cheques you make out

against theft or forgery?

5. Why do you think cheques were developed as a financial instrument?

7. What has recently replaced cheque usage in most cases?

Banks operate two main types of account, a current account and a deposit or savings account. Current accounts or cheque accounts (AmE – checking accounts) are the accounts used for the regular banking and withdrawal of money. With this type of account a cheque book will be given to the customer (account-holder) for him to make payments to people to whom he owes money. When the account-holder wants to pay money to someone, he /she writes a cheque. This is an order to the bank to pay money to someone from his/her account. As some shops do not like taking cheques because the customer might be dishonest, banks give most account-holders a guarantee card (also called a cheque card or a banker’s card) which they sign. The shop assistant compares the signature on the cheque and on the card and writes the guarantee card number on the back of the cheque. The bank guarantees payment (usually from £50.00 to £100.00) even if the account-holder does not have enough money in his/her account at the time. The account-holder will also be given a paying-in book for him to pay money into his account. A current account usually does not earn interest.

When someone opens a deposit account with the bank it means that he/she puts money into the bank without withdrawing it for some time. A deposit account earns interest which is given on the balance held in the account. One can withdraw money from this account only if advance notice is given.

When the bank has agreed to let you open a current account, it will ask you for a specimen signature. This enables the bank to ensure that your cheques are in fact signed by you and have not been forged. We can then use the cheques to make payments out of the account. Normally we must ensure that we have banked more than the amount paid out. If we wish to pay out more money than we keep in the bank, we will have to see the bank manager. We will then discuss the reasons for this with him, and if he agrees, he will give his permission for us to “overdraw” our account. This is known as a bank “overdraft”.

A cheque (or check in American English) is a document/instrument (usually a piece of paper) that orders a payment of money from a bank account. The person writing the cheque, the drawer, usually has a current account (British), or checking account (US) where their money was previously deposited. The drawer writes the various details including the money amount, date, and a payee on the cheque, ordering their bank to pay that person or company the amount of money stated and signs it.

Cheques are a type of bill of exchange and were developed as a way to make payments without the need to carry around large amounts of gold and silver.

Technically, a cheque is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specified transactional account held in the drawer's name with that institution. Both the drawer and payee may be natural persons or legal entities.

Although cheques have been around since at least the 9th century, it was during the 20th century that cheques became a highly popular non-cash method for making payments and the usage of cheques peaked. By the second half of the 20th century, as cheque processing became automated, billions of cheques were issued each year; these volumes peaked in or around the early 1990s. Since then cheque usage has fallen, being partly replaced by electronic payment systems. In some countries cheques have become a marginal payment system or have been phased out completely.

NOTES

1) to owe money – быть должным, задолжать

e.g. I owed him a large sum of money.

2) interest ... on the balance – процентный доход,

начисляемый на остаток счета (обычно в конце года)

3) to forge a cheque – подделывать чек

4) to overdraw an account – осуществлять овердрафт, превысить остаток счета в банке

e.g. I am £50 overdrawn.

e.g. My account is overdrawn by £50/is £50 overdrawn.

5) overdraft – банковский овердрафт, сумма

получаемая сверх остатка на счете

e.g. I was given a large overdraft, now I am paying it off.

6) a drawer – чекодатель, векселедатель,

трассант

7) a payee – получатель платежа, ремитент

8) bill of exchange – вексель, тратта

9) ne`gotiable – передаваемый, переуступаемый

другому лицу (о чеке)

10) natural persons or legal – физические или юридические лица

entities

11) marginal – зд. минимальный, несущественный

12) to phase out – постепенно выводить из употребления

WRITING A SUMMARY