Understanding Financial Institutions

What is a key characteristic of retail banks?

• They operate entirely online.

• They are nonprofit organizations.

• They have physical locations and offer a variety of services.

• They only provide investment services.

Which type of financial institution is owned and operated by its members?

• Retail Banks

• Credit Unions

• Online Banks

• Investment Banks

What is a disadvantage of using online banks?

• They do not offer savings accounts.

• Lack of physical branches for in-person assistance.

• Limited access to ATMs.

• Higher fees compared to traditional banks.

What service do investment banks primarily provide?

• Managing real estate properties.

• Accepting deposits and offering checking accounts.

• Offering personal loans and credit cards.

• Providing market advice and helping businesses with stocks.

How do banks primarily make money?

• By selling insurance policies.

• Through interest on loans and various fees.

• By charging high interest on savings accounts.

• By offering free services to attract more customers.

What is overdraft protection?

• A free service provided by all banks.

• A type of insurance for bank accounts.

• An option that covers overspending and charges a fee.

• A service that prevents any overdraft from occurring.

Which financial service is NOT typically offered by banks?

• Check writing

• Debit and credit cards

• Insurance plans

• Mortgages

What is a benefit of using a credit union?

• Fewer fees and higher interest rates on deposits.

• Membership is open to everyone without criteria.

• They operate entirely online.

• Higher fees than retail banks.

What should you avoid to prevent bank service charges?

• Using only online banking services.

• Opening multiple accounts in different banks.

• Maintaining a budget and monitoring your account.

• Using overdraft protection frequently.

What is the average overdraft fee in the United States?

• $15.00

• $25.00

• $45.00

• $33.36

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