Banking Basics Quiz

William, Nora, and Michael are discussing their financial habits. William mentions he uses a checking account. Nora and Michael are curious and ask, 'What is the purpose of a checking account, William?'.

• To manage everyday transactions and expenses.

• To build a retirement fund

• To save for a vacation

• To purchase a home

Hannah, Ava, and Benjamin are discussing their savings accounts. Hannah believes that compound interest is calculated at a fixed rate over a specific period of time. Ava thinks that compound interest is calculated only on the initial principal amount. Benjamin, however, argues that compound interest is calculated on the initial principal and also on the accumulated interest of previous periods. Who is correct?

• Hannah: Compound interest is the interest calculated at a fixed rate over a specific period of time.

• Ava: Compound interest is the interest calculated only on the initial principal amount.

• Benjamin: Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods.

• None of them are correct.

Mia is planning to get her first card but is confused between a debit card and a credit card. Samuel explained the difference to her. Can you identify the correct explanation given by Samuel?

• A debit card has a higher interest rate than a credit card.

• A debit card is for online purchases only, while a credit card is for in-store purchases only.

• A debit card is linked to your bank account and deducts money directly, while a credit card allows you to borrow money up to a certain limit.

• A debit card has an annual fee, while a credit card does not.

Isla recently started working as a bank teller. Mason, a friend who is curious about her new job, asked her about her role. How should Isla describe her job to Mason?

• I clean the bank premises.

• I handle customer transactions and provide information about bank products and services.

• I drive the bank's armored vehicle.

• I manage the bank's social media accounts.

Priya is considering switching to online banking. What advantages could she enjoy if she makes the switch?

• Long waiting times, limited services, high fees

• Convenience, easy money transfer, automatic bill payments

David went to the bank to withdraw money. He was informed that he had withdrawn more money than was available in his account and was charged an extra fee. Luna and Olivia were confused about this. Can you explain this concept to them?

• David was charged an overdraft fee. Overdraft fees are charges imposed by a bank when a customer withdraws more money than is available in their account.

• David was charged a closure fee. Overdraft fees are charges imposed by a bank when a customer closes their account.

• David was charged a deposit fee. Overdraft fees are charges imposed by a bank when a customer deposits more money than is available in their account.

• David was given a reward. Overdraft fees are rewards given by a bank for maintaining a high account balance.

Mason, Isla, and Luna are discussing the importance of maintaining a good credit score. Mason believes it's important but isn't sure why. Can you help him understand why it's important?

• It can affect his ability to get loans, credit cards, and favorable interest rates.

• It can lead to higher insurance premiums for him

• It has no impact on his financial opportunities

• It only affects his ability to rent an apartment

Priya received a paycheck from her part-time job. She needs to deposit it into her bank account. What should she do?

• Give the check to Jackson, a stranger she met on the street

• Take a picture of the check and post it on social media

• Fill out a deposit slip with her account information, endorse the back of the check, and hand it to a teller or use an ATM to deposit it into her account.

• Throw the check in the trash

Oliver, Benjamin, and Sophia are planning to open their own bank accounts. They are discussing the different types of accounts that banks offer. Can you help them identify the types of accounts?

• Investment accounts, retirement accounts, insurance accounts

• Online accounts, mobile accounts, in-person accounts

• Savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs)

• Credit accounts, loan accounts, mortgage accounts

Noah, Elijah, and Olivia are discussing about their savings. Noah mentions about FDIC insurance. Can you explain what Noah meant by FDIC insurance?

• Noah meant that FDIC insurance is a program that only protects money invested in the stock market.

• Noah meant that FDIC insurance is a government program that protects the money you deposit in banks up to $250,000 per depositor, per insured bank.

• Noah meant that FDIC insurance is a private program that only protects large deposits in banks.

• Noah meant that FDIC insurance is a program that guarantees unlimited protection for all deposits in banks.