Wise Practice Test (Banking)

If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the

• A.  US Treasury Department.
• B.  Federal Deposit Insurance Corporation. (FDIC).
• C.  State Banking Commission.
• D.  Federal Reserve Board.

When James received his paycheck, he planned to cash it at a check cashing store.  You advise him to cash it at his own bank if possible. Why?

• A.  They typically require a two day waiting period before giving cash
• B.  They typically charge high fees
• C.  There is likely to be a ceiling on the size of the check he can cash
• D.  They generally require a co-signor  

Which financial product typically pays the highest rate of interest?

• A.  Savings account
• B.  Money market account
• C.  Certificate of deposit
• D.  Common stock  

Financial services and products generally offered by banks and credit unions include:

• A.  Real estate listings
• B.  Savings and loans
• C.  Legal services
• D.  Business plans

The best suggestion you gave a friend who is writing a check for the first time is:

• A.  Date the check because it is usually proof of payment
• B.  Use pencil to permit changes
• C.  Make the check payable to cash
• D.  Use the checkbook stub or register to keep a record of the date you write the check

The best reason for depositing money in a bank or credit union savings account instead of keeping your money "under the mattress" is that:

• A.  Money deposited in savings accounts are F.D.I.C. insured
• B.  Most savings accounts earn a guaranteed rate of interest
• C.  Most savings accounts come with a free credit card
• D.  Money in a savings account can be accessed any time during the day or night

How can individuals be prepared for losing their job or having a large medical expense?

• A.  Maintain a checking account with sufficient funds
• B.  Pay credit card bills on time
• C.  Prepare a budget
• D.  Save at least three months of income

A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his cancelled checks returned. The teenager should be aware that the reason cancelled checks are NOT returned is to

• A.  protect him from providing opportunities for forgery.
• B.  insure that he does not receive important materials he is likely to lose.
• C.  lessen the bank?s need to maintain records of check transactions.
• D.  save the bank money associated with returning copies of these checks.

A bank Certificate of Deposit is a:  

• A.  Savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty
• B.  Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals
• C.  Cash deposit in a savings account that earns interest
• D.  Certificate for deposits that are issued for half the face value

Consumer finance companies, which are often advertised on TV, are also known as:

• A.  Banks
• B.  Savings and loan associations
• C.  Small loan companies
• D.  Purchase loan lenders