Banking Unit review

What is one difference between a bank and a credit union?

• A bank is for-profit, whereas a credit union is non-profit.
• A bank has higher fees, whereas a credit union has lower interest rates.
• A bank is owned by its members, while a credit union is publicly traded.
• A bank offers loans, while a credit union does not.

Which is not a regulatory body that oversees banks?

• Federal Deposit Insurance Corporation

• Federal Reserve
• Office of the Comptroller of Currency

• Consumer Financial Protection Bureau.

What is unbanked?

• Unbanked individuals have multiple bank accounts.
• Unbanked individuals do not have access to traditional banking services.
• Unbanked refers to those who only use credit cards.
• Unbanked individuals are wealthy and avoid banks.

1. Which of the following is an effective strategy for personal saving?

• Save a certain percentage of each paycheck and deposit it directly into a savings account

• Investing all savings in high-risk stocks.
• Spending all income without tracking expenses.
• Relying solely on credit cards for purchases.

1. Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

• 18 months
• 24 months
• 12 months
• 30 months

1. All of the following statements about bank accounts are true EXCEPT…

• If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails

• Historically, savings accounts earn higher returns than investments in the stock market

• 1. Money in a checking account is usually easy to access via ATM, debit card or check

• Many banks pay interest on the money you deposit into your savings account

Three of these statements best describe a checking account. Which statement best describes a savings account?

• This account offers a convenient way to pay bills and access cash from an ATM

• This account pays you interest on money you have put away for later to help your money grow

• This account is automatically debited when you use a debit card

• This account typically allows an unlimited number of transactions per month

. You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. 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 directly from your savings account

Fill in the blanks:  If inflation is _____________ your savings account interest rate then you will be ______________ purchasing power.

• higher than; gaining

• stable; maintaining
• volatile; increasing
• higher; losing

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

• Ignore the alert and continue using the ATM.
• Withdraw more money to increase the balance.
• Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.

• Contact her bank immediately as it appears that her account may have been hacked