Current account

What does the acronym CCI stand for?

Correct answer C. Comprehensive Cost Indicator.

The CCI is found in the 'Information Sheet' that a bank has to provide to a customer before opening a current account. It gives an immediate comparison of the costs of the different current accounts offered by banks. It can be very different from the cost actually incurred at the end of the year, depending on how the account services are actually used.

How many days does it take at most to switch your account from one bank to another?

Correct answer D. 12.

The transfer you requested must be completed within a maximum of 12 working days. If this deadline is not met, you are entitled to monetary compensation.

When can I switch my account from one bank to another?

Correct answer A. Always.

You can request portability at any time, even if your old account has a negative balance (this doesn't prevent the transferability of recurring payment services to another account); you can also request it if you have a mortgage or other loan or if you benefit from ancillary services linked to the account (e.g. an insurance policy).

Portability for consumer payment accounts means...

Correct answer B. Transferring payment services and possibly payment account balances from one bank to another where you have another account.

This is the right to have all or some of the payment services, and also the positive balance on your account, transferred to another payment account with another provider; you can decide whether to keep or close your old account. The transfer takes place via a facilitated procedure and must be completed within a maximum of 12 working days.

Which of these products is intended by law for financial inclusion purposes?

Correct answer C. Basic account.

This account gives all consumers the opportunity to use basic payment services. It's a useful and convenient product for those with simple money management needs and for the economically weaker sections of the population, who can have one free of charge under certain conditions (pensioners and those with an ISEE - the indicator that takes into account the wealth of a household - below a certain threshold).

How high is the guarantee on current account deposits?

Correct answer A. €100,000 per person, per bank.

The sums deposited in the accounts benefit the guarantee offered by the Interbank Deposit Protection Fund - FITD and, for cooperative credit banks, by the Depositors' Guarantee Fund (FGDCC). The coverage limit is €100,000 per depositor and per individual bank.

Imagine that you leave €100 in a current account that yields a 2 per cent interest per annum and has no fees. After five years, how much money do you think is available (without taking taxes into account)?

Correct answer C. Over €110.

Let's do the maths. You have deposited €100 (capital) on which interest accrues during the year at the annual rate of 2 per cent. After one year, the sum at your disposal is €102: €100 initial capital plus €2 interest (simple interest). From the second year, the €2 interest is added to the capital. If the conditions don't change, at the end of the second year the sum deposited will produce interest of €2 and 4 cents: the 4 cents represent the interest accrued on the €2 of interest added to the initial capital at the end of the first year. The mechanism is repeated in the following years, bringing the sum available in the account to €110.41 at the end of the fifth year (compound interest).

Suppose you leave €1,000 in a current account that yields 1 per cent interest per annum and has no management fees. Then imagine that inflation is 2 per cent. Do you think that in a year's time, with the money in your account, you'll be able to buy the same amount of goods that you could buy by spending the €1,000 today?

Correct answer B. No, I'll be able to purchase a smaller quantity.

The interest rate can't compensate for the loss of purchasing power caused by inflation. Inflation occurs when there's a general increase in prices, which is not limited to individual items of expenditure. If there's inflation, a unit of money (e.g. €1) makes it possible to buy a smaller quantity of goods and services; i.e. the real (effective) value of the unit of money is lower than in the past. In other words, inflation reduces the purchasing power of money.

Suppose that, on 1 January 2025, you have €100 in a deposit account and that the bank agrees to pay a guaranteed interest rate of 2 per cent per annum on the sums deposited. No other transactions are carried out on this account, either deposits or withdrawals. At the end of the first year, after payment of interest and without taking into account any fees charged, there are €102 in your account.

Correct answer A. TRUE.

Let's do the maths.

On 1 January 2025, you deposited €100 (capital), on which interest accrues during the year at a rate of 2 per cent on an annual basis..

Date	Capital	Interest rate	Month	Interest	Amount available
1 January 2025	€100
31 Decembrer 2025	€100	2%	12	€2	€102

On 31 December 2025, the sum at your disposal is €102: €100 initial capital + €2 interest (simple interest).

And after five years, if no further transactions are made on this account, either deposits or withdrawals, if there are no charges and if the bank continues to pay 2 per cent interest per annum, there will be €110.

Correct answer B. False.

Let’s see why. At the beginning of the second year, the €2 of interest have been added to the capital. If the conditions don’t change, at the end of the second year the sum deposited will produce €2.04 of interest: the 4 cents are the interest accrued on the €2 of interest added to the initial capital at the end of the first year. The mechanism is repeated in subsequent years (compound interest), as described in the table below.

Date	Capital	Interest Rate	Month	Interest	Amount available
1 January 2026	€102	2%	12	€2.04	€104.04
1 January 2027	€104.04	2%	12	€2.08	€106.12
1 January 2028	€106.12	2%	12	€2.12	€108.24
1 January 2029	€108.24	2%	12	€2.16	€110.41

So after five years you will have just over €110 in your deposit account!

Knowing how to calculate the percentage of an amount is what you need to understand the yield and the cost of the simplest and most popular banking products. You need it to calculate simple and compound interest.

Interest (I) on an amount is calculated on the basis of three elements: the amount of the sum or Capital (C); the Interest Rate (R); and the Time (T). Therefore, the formula to be used is I=CxTxR/100. Be careful: the rate must be expressed in a manner consistent with time (annual rate per time measured in years; half-yearly rate per time measured in semesters, and so on).

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