Missed Questions

Marcus has $500 in a savings account earning 3% APY. He wants to move the money to a checking account for everyday spending. What is the main disadvantage?

• Lower liquidity

• Loss of interest earnings

• Overdraft protection applies

• Checking accounts charge interest

Answer explanation

The main disadvantage of moving money from a savings account to a checking account is the loss of interest earnings. Checking accounts typically do not earn interest, unlike the savings account earning 3% APY.

Credit unions are protected by insurance from which agency?

• NCUA

• IRS

• SEC

• NSA

Answer explanation

Credit unions are insured by the National Credit Union Administration (NCUA), which protects members' deposits. The other agencies listed (IRS, SEC, NSA) do not provide this type of insurance.

A person loses their debit card but reports it within 48 hours. What is the MAXIMUM they may be responsible for?

• $0

• $25

• $50

• Full amount stolen

Answer explanation

If a debit card is reported lost within 48 hours, the maximum liability is $50 for unauthorized transactions, according to federal regulations. Therefore, the correct answer is $50.

A student wants a free checking account with no minimum balance. What should they look for FIRST?

• Interest rate

• Monthly maintenance fees

• Bank's advertising

• Number of drive-thru windows

Answer explanation

The first thing to check for a free checking account is the monthly maintenance fees. These fees can negate the benefits of having no minimum balance, making it crucial to ensure there are no hidden costs.

A customer wants a payment method that is 'as good as cash' for a used-car purchase. Which should they choose?

• Personal check

• Cashier’s check

• Store gift card

• Digital wallet transfer

Answer explanation

A cashier’s check is considered 'as good as cash' because it is guaranteed by the bank, making it a secure payment method for a used-car purchase. Personal checks can bounce, while gift cards and digital transfers may not be accepted.

Which statement best describes the difference between a bank and a credit union?

• Banks are nonprofit and credit unions are for-profit.

• Credit unions are nonprofit and usually offer lower fees than banks.

• Banks only offer savings accounts, not loans.

• Credit unions are open to anyone with no membership requirements.

Answer explanation

Credit unions are nonprofit organizations that typically offer lower fees and better rates than banks, which are for-profit institutions. This makes the correct choice the one highlighting credit unions' nonprofit status and lower fees.

Which statement explains why prepaid debit cards can be costly?

• They offer high interest

• They often include activation and reload fees

• They require a checking account

• They are FDIC-insured

Answer explanation

Prepaid debit cards can be costly because they often include activation and reload fees, which can add up over time, making them more expensive than other payment options.

A person puts $2,000 into a savings account to build an emergency fund. This is MOST aligned with which purpose of savings?

• Daily spending

• Long-term investing

• Short-term financial goals

• Securing loans

Answer explanation

Putting $2,000 into a savings account for an emergency fund is primarily aimed at achieving short-term financial goals, as it provides quick access to funds for unexpected expenses.

When would a stop-payment order be appropriate?

• When a check clears too quickly

• When a mailed check was lost or stolen

• When the check amount is too small

• When the bank requests one

Answer explanation

A stop-payment order is appropriate when a mailed check is lost or stolen, as it prevents unauthorized cashing. The other options do not warrant a stop-payment action.

Why is cashing a paycheck at your own bank better than using a check-cashing store?

• Banks give higher returns

• Check-cashing stores charge high fees

• Banks require no identification

• Banks cash checks instantly

Answer explanation

Cashing a paycheck at your own bank is better because check-cashing stores charge high fees, which can significantly reduce the amount you receive compared to cashing it at your bank.