Topic 4.

Banks and the Stock Market

Services offered by banks

 Accepting deposit: It’s one of the two basic functions of a bank. Banks
take care of customer’s money and also pay interest in some cases.
 Advancing loans: Banks give credit facilities (hitelkeret) to people and this
is the basic source of their income.
 Loan services: Personal, business, mortgage
 Debit/Credit Card
 ATM Services
 Transfer money: Banks help customers in sending money from one ac-
count to another and also from one country to another.
 Overdraft facility: Banks allow its valuable customers to withdraw more
money than they have in their accounts.
 Consultancy services
 Foreign currency exchange
 Bank Lockers: Banks provide facilities of lockers to the customers to keep
their values in safe
 Insurance services
 Leasing services

Advantages and possible disadvantages of credit and debit cards

Credit cards are used to make payments when buying goods or services directly or to
withdraw cash from ATM. The credit limit is the amount that the cardholder can
spend. Although it gives access to instant credit, it also holds the opportunity of
overspendig. The cardholder has to pay the negative balance by a certain date to
avoid any interest charges.
Debit cards, similarly to credit cards, can directly be used to purchase goods and
services. However, unlike credit cards, the cardholder can spend only the amount
which is on his current account.

Advantages and disadvantages of paying in cash or by debit card

Cash

Advantages
 Cash is more convenient and nearly every retailer accepts it.
 You know how much money you have on you, and you can’t overspend
 Tangible currency can be easier to manage
Diasdvantages
 Cash is by far the most vulnerable to theft. If you lose your wallet, there’s little
chance of it being returned with the money untouched.
 If you don’t have enough money on you, you have to withdraw money from an
ATM and usually you have to pay a fee
 Cash can be torn
 Cash can be faked, which is not noticeable for ordinary people

Debit card

Advantages
 Using a credit card can be faster than using cash
 Credit card users are also able to conduct transactions online and over the
phone, and hotel and rental cars are much easier to reserve with a debit card
than they are with cash.
 You can’t be cheated by getting back a wrong change

Disadvantages
 It is problematic when you lose your debit card and you don’t have cash.
 You have to pay for blocking it and it takes a lot of time to get the new one.
 Moreover you have to pay for the new card as well.
 You can get into trouble if the internet connection doesn’t work in a shop,
because the payment machine is working by internet connection

Applying for a bank loan (for your business)

The first step is to prepare all the key documents, such as the business plan, the most
recent financial statement available, and a repayment plan. The business plan must
include the description of the business and its products or services, a complete market
analysis with special attention to the competitors, a marketing strategy. Banks also
want to know how the loan will be used and if the borrower has a realistic plan for
paying the money back. The lender needs a collateral (biztosíték, fedezet) too, that is
a security for the loan. The collateral is a property for example a car or a real estate.

monthly repayment – havi törlesztőrészlet

credit terms – hitel feltételek
duration – futamidő
collateral – fedezet, jelzálog, biztosítés
statement – bankszámlakivonat
interest – kamat
maturity – lejárat
E-banking

Benefits of e-banking
 extremely convenient
 easy access to services 24/7
 quick way of money transfer from one account to another, including foreign
accounts
 environment friendly, paper is not used
 cheap, you have to pay only few hundred forints a month for your e-bank
account
 you can do almost everything: change limits, pay your bills, buy motorway
vignettes

Drawbacks of e-banking
 password can be stolen
 danger of hackers
 fast Internet access is needed
 you have to learn it
 you lose personal contact

Investing money on the Stock Market

Stock Exchange is a market where securities are bought and sold under fixed rules. It
is an organized forum for concentrated supply and demand. It helps the capital flow
between corporate and individual investors that have listed securities (tőzsdés
jegyzett értékpapír). They introduce new securities to the market and fix prices. The
performance of the stock exchange is considered one of the most important indicators
of a county's economy.

What to look for in a stockbroker

The stockbroker is a salesperson who takes the client's order to buy or sell shares or
bonds and gives investment advice, notifies his client's opportunity that suits his
investment goals. They earn commission on each sale or purchase.