PF Chapter 7

Money in a checking account is called a demand deposit.

• True

• False

A prepaid phone card is an example of a debit card.

• True

• False

A savings & loan association is a financial institution that is owned by its members.

• True

• False

A finance company specializes in savings accounts and mortgage loans.

• True

• False

Pawnshops will offer payday loans with high finance charges to desperate borrowers.

• True

• False

A stop-payment order is a request that a bank or other financial institution not cash a particular check.

• True

• False

According to the Truth in Savings Law, financial institutions have to guarantee you a minimum interest rate on your deposits.

• True

• False

Overdraft protection is an automatic loan made to an account if the balance will not cover the checks written.

• True

• False

Which of the following financial services is best suited for saving money over a period of years?

• certificate of deposit

• checking account

• demand deposit

• mortgage loan

Credit cards allow you to ____.

• spend only the amount in your account

• borrow money for a short term

• protect your checks from thieves

• transfer money between accounts on-line