Banks, Credit Unions & Checking Accounts

You are at the checkout counter at the local supermarket, use your debit card to pay for your groceries, and select “credit” when the cashier asks “Debit or credit?” Where does the money for this purchase come from?

• Your credit card company covers the cost
• It is deducted directly from your checking account
• Your credit card company provides you with a cash advance to cover the cost
• It is deducted from your credit card account

Each of the following is a way to access money in your checking account EXCEPT...

• Take out cash using your debit card at an ATM machine
• Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal
• Write a check to pay the rent on your apartment
• Swipe a prepaid card to pay for your fast food purchase

Which of the following transactions will REDUCE your checking account balance immediately?

• Writing your monthly rent check which you will mail tomorrow
• Using your debit card to pay for groceries at the supermarket
• Using your credit card to pay for your school books
• Depositing a check at a local bank branch

Which action below is considered a best-practice for check writing?

• Using a pencil so that you can quickly erase any errors without having to throw any checks away
• Recording all of your transactions in a check register
• Leaving the “to” field blank until the very last minute, so that no one else can steal the check
• Writing quite sloppily in each field so that no one else can forge your handwriting

How are credit unions and banks different?

• Typically, deposits at a bank are insured, but deposits at a credit union are not
• Banks charge overdraft fees, but credit unions do not
• Banks are owned by shareholders, while credit unions are owned by members
• Banks allow customers to do online banking, while credit unions are too small to provide that service

You find three receipts from your activities today: (1) ATM withdrawal of $60 plus $3 out-of-network ATM fee, (2) Debit card used for grocery bill of $34 plus cash back of $20, and (3) ATM deposit of $90 from birthday checks. What is your current balance if you started the day with $300 in your account?

• $273
• $333
• $83
• $300, because banks don't process any same-day transactions

You open a new bank account at Eastside Savings. You see FDIC stickers around the bank, and the teller specifically mentions that Eastside Savings is "FDIC insured". A few months later, you hear on the radio that Eastside Savings is struggling to stay in business. Your savings balance is $500. What would happen to that money if Eastside Savings failed?

• You would receive all the money you have deposited at Eastside Savings since FDIC insurance covers accounts up to $250,000.
• You could lose $250 since FDIC insurance only covers 50% of the money you have deposited.
• You would lose all of your money.
• You would receive $250,000 since FDIC insurance provides each account at the bank with $250,000 regardless of how much they have deposited.

Which of the following statements about banks is FALSE?

• If it is FDIC-insured, your money is safe even if the bank fails
• Many banks pay interest for the money you deposit with them
• Historically, savings accounts earn higher returns than investments in the stock market
• Money in a bank is usually easy to access via ATM, debit card or check

If you used the 50-30-20 rule of budgeting, how much money would you be saving?

• 20%
• 30%
• 50%
• 100%

Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?

• Regular savings account
• Money Market account
• Checking account
• Certificate of Deposit