Financial Institutions

Which is true about banks?

• Banks borrow money from people. Banks do NOT pay them interest.

• Banks give money to people. People do NOT have to pay the money back.

• Banks lend money to people. People pay the money back with interest.

• Banks make money. Banks print their own bills and create their own money

What is owned by stockholders and operated for profit?

• Commercial Bank

• Mutual Savings Bank

• Credit Union

• savings and loan association

The most common type of bank accounts are

• CDs and DDAs

• Mutual Funds

• Money market accounts

• Savings & Checking accounts

A credit union...

• is a financial institution that focuses on taking deposits and using them to fund mortgages.
• is a non-profit institution owned by its members and provides financial services to its members.
• offers a broad range of deposit account and gives loans to individuals and businesses. 
• is a financial institution for students only

The borrower gives the lender his/her automobile title in exchange for a set amount of cash.

• Payday loan

• Title loan

• Rent-to-own loan

Short‐term loan that provides immediate cash by securing a borrower’s written check or receiving authorization for automatic withdrawal from the borrower’s depository institution account

• Title loan

• Pawn loan

• Payday loan

Which of the following is a for-profit institution that offers numerous financial services?

• commercial bank
• credit union
• school
• financial counselor

What are two characteristics of a bank?

• They are non-profit organizations owned by members.
• They pay profits to their shareholders and can be used by anyone.
• They charge better interest rates on loans and have low fees.
• Deposits are insured for $100,000 by the NCUA.

What does the FDIC insure the bank against?

• It insures banking customers' accounts so that they don't lose their money if the bank collapses.

• It insures the building that houses the bank against loss and damages.

• It insures the bank against theft.

• It insures the bank against lawsuits.

What are two characteristics of a credit union?

• They require membership and are owned by those members.
• They charge higher interest rates on loans and have more fees.
• They pay profits to their shareholders and can be used by anyone.
• Deposits are insured by $100,000 by the NCUA.