Chapter 8 Lesson 1 The Purpose of Banks

What is the primary purpose of a bank according to the text?

• To offer credit cards and personal loans

• To help you protect, access, and manage your money

• To charge high fees

• To provide payday loans

What is the maximum amount insured by the FDIC or NCUA for your bank deposits?

• $100,000

• $250,000

• $500,000

• $1,000,000

Which of the following is NOT a reason people might be unbanked or underbanked?

• Distrust of banks

• Lack of financial literacy

• High interest rates on savings accounts

• Unemployment

What is a common consequence of being unbanked or underbanked?

• Access to high-quality financial services

• Dependence on predatory financial services

• Lower interest rates on loans

• Increased savings

Which of the following is a predatory financial service?

• Savings account

• Payday lender

• Credit union

• Certificate of deposit

What percentage of borrowers use payday loans for regular monthly expenses?

• 30%

• 50%

• 70%

• 90%

Why might some people avoid using banks, according to the text?

• They offer too many services

• They have had bad customer service experiences

• They provide high interest rates on loans

• They are too far away

What should you look for to ensure your money is safe in a bank?

• High interest rates

• FDIC or NCUA logos

• Low account balances

• Free credit cards

What is a disadvantage of keeping money in a shoebox under your bed?

• It earns compound interest

• It is insured by the FDIC

• It is not secure or insured

• It is easily accessible

What is a key piece of advice given in the text regarding financial services?

• Always use payday loans for quick cash

• Be intentional with your money

• Avoid all bank services

• Use as many financial products as possible