Which of these services do depository institutions offer?

Ability to take more money than you have without penalty

What is a debit card?

Plastic card that used to connect to bank accounts

Plastic card only used with specific stores

Used to borrow money like a credit card

An ATM can allow you to...

Speak with others around the world

Pay money directly to your boss

What is contactless payment?

Transaction with no physical connection to the person being paid

Transaction completed where you don't use your hands

Payment made where no people are contacted

Payment where money is not used

A key difference between commercial banks & credit unions is that:

Commercial banks are ‘for-profit’ and credit unions are ‘not-for-profit’

Commercial banks typically pay higher interest rates than credit unions.

Credit unions are more commonly located in rural areas while commercial banks are more commonly located in urban areas.

Commercial banks offer more services, such as debit cards and online banking, than credit unions.

Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method of saving because she can have immediate access to the money if she needs it. Recently, in a class at school, discussion focused on why depository institutions are safer than her piggy bank. Some students’ comments were based on fact while others were based on myths. Which aspect of security at a depository institution is NOT TRUE?

Depository institutions have insurance protection. Depositors can have multiple accounts insured at the same depository institution as long as each account has no more than $100,000.

Depository institutions have insurance protection for up to $250,000 per depositor per account type. I If something happened to the money in the bank, you would get the value of your account back as long as the deposited amount was no more than the insurance limit.

All money stored at a depository institution is kept safe at all times by numerous security measures.

Information about depositors and their accounts is kept in secure data storage.

Sanjay is concerned about the safety of the money in his savings account. Which type of depository institution should he choose?

He could safely choose either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements.

A commercial bank, since his deposits would be insured by the Federal Deposit Insurance Corporation (FDIC)

A credit union, since his deposits would be insured by the National Credit Union Association (NCUA)

Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.

Ariel is saving money to purchase a new computer before she leaves for college in two years. She wants to open a special account at a depository institution to keep her saved money safe. She has asked you for advice on which type of account would be best for her. What would be the best advice for Ariel?

Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer.

Check several depository institutions and choose one with a free, no-interest checking account. That way, when Ariel has saved enough for her computer she can simply write a check to pay for it.

Look for a Credit Union that offers share draft accounts. These secure accounts are designed especially for saving for long-term financial goals.

Shop around for a depository institution that offers safe deposit boxes. These accounts offer extra security for deposits and can be set up to allow her to withdraw her money when she needs it.

Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest?

When earning interest, look for low rates.

Interest is the price paid for using someone else’s money.

When paying interest, look for low rates.

The amount of interest earned or paid is determined by the interest rate.

Samantha wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do?

Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent is immediately deducted from her account.

Apply for mobile banking. That way she can access her money with her smartphone to pay for the things she needs. The amount she spends would automatically be deducted from her savings account.

Apply for a credit card. That way she can use the card to purchase the things she needs and pay for it when the credit card statement comes from her checking account.

Request a cashier’s check from her depository institution. That way she can spend money from her checking account without risk of an overdraft fee.

Sally is getting ready to go away to college. What would be three important factors for her to consider when choosing a new bank?

location, services offered, interest rates offered

location, flavor of candy offered, services offered

insurance, services offered, fees

What services are offered by credit unions?

the same services as commercial banks

a place to gather with other people that have something in common

Depository Institutions and Income/ Exp. Statements

9th - 12th Grade

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Practice Problem

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Medium

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CCSS

6.NS.C.5, 7.NS.A.1A, 7.NS.A.1C

Standards-aligned

Melissa Curtsinger

Used 6+ times

FREE Resource

40 questions

Show all answers

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a characteristic of a commercial bank?

For-profit

Non-profit

Membership qualifications

Only available online

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is characteristic of a credit union?

Open to anyone

Membership qualifications

No physical locations

Non-profit

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Does location affect your choice of depository institution?

Yes

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Are credit unions insured?

Yes, and only credit unions are insured

Yes, by the NCUA

Only commercial banks are insured

No depository institutions are insured

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is interest?

Price paid for using someone else's money

Percentage of people interested in using banks

How much money the bank pays to keep running

The amount of money the bank has

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is an interest rate?

Percentage rate used to calculate interest

Percentage rate of people using the bank

Percentage rate of how much money you've spent

Percentage rate of how much money the bank owns

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is credit?

Borrowed money that you have to pay back with interest

Money you do not need to pay back

Money you've earned for having good credit that isn't paid back

Borrowed money that isn't paid with interest

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