WorksheetsUnderstanding Banking Unit Review
Total questions: 22
Worksheet time: 11mins
What is the main way banks earn most of their income?
By charging fees for opening accounts
By selling paper money and coins
By collecting interest on loans they give
By providing free financial advice
How do Banks provide security?
By offering insurance that covers losses if money is stolen
By keeping all cash in locked safes at home
By guaranteeing unlimited protection for any amount of money
By preventing you from ever spending your money
What is the role of the FDIC (Federal Deposit Insurance Corporation) in protecting your money?
It guarantees unlimited protection for all deposits in any bank
It pays you back up to $250,000 if your bank fails
It prevents you from ever withdrawing more than $500 at a time
It provides loans to customers who need extra money
What is the best definition of currency?
Digital codes used to access online accounts
Paper money and coins used for financial transactions
Checks written to pay businesses or individuals
Credit given to customers before payment is made
What is a check?
A savings account that earns interest
An order to a bank to pay a specified amount to a person or business
A type of insurance that protects your money in case of theft
Paper money and coins used for financial transactions
Which of the following is an advantage of using checks?
They guarantee unlimited money in your account
They provide safety, convenience, and records of transactions
They always earn interest like savings accounts
They prevent you from ever spending more than you have
What does the term overdraft mean in banking?
Depositing money into a savings account to earn interest
Writing a check to pay a business or person
Withdrawing money so that the account balance goes below zero
Exchanging paper money for coins at the bank
What is an overdraft fee?
A reward given by the bank for saving money
A fee charged when your account balance goes below zero after a withdrawal
A payment the bank makes to you for writing checks
A tax collected by the government on financial transactions
What is a deposit in banking?
Money taken out of a bank account to pay for expenses
A sum of money placed or kept in a bank account, usually to gain interest
A fee charged when your account balance goes below zero
Paper money and coins used for financial transactions
What does a withdrawal mean in banking?
Placing money into a bank account to earn interest
An act of taking money out of an account
Writing an order to a bank to pay someone
Paying a fee when your account balance goes below zero
What does credit mean in financial terms?
Paper money and coins used for transactions
A fee charged when your account balance goes below zero
The ability to obtain goods or services before payment, based on trust that payment will be made later
A sum of money placed into a bank account to earn interest
Scenario: Maria keeps $500 in cash hidden at home. One day, her house catches fire and the money is destroyed.
Question: What would have been a safer way for Maria to protect her money?
Keep it hidden in her closet
Deposit it in a bank, where insurance covers losses
Exchange it for coins and store them in a jar
Lend it to a friend without a contract
What does it mean to be financially literate?
Knowing how to write checks and deposit money only
The knowledge and skills to understand money, including earning, saving, spending, borrowing, and investing
Having unlimited money in your bank account without planning
The ability to avoid using banks or financial services
What is a good example of living within your means?
Spending more money than you earn and relying on credit cards
Spending less money than you earn, so you can pay for needs, avoid debt, and save
Saving no money and using all of your income for wants
Borrowing money regularly to cover everyday expenses
What is a good example of budgeting?
Spending money only on entertainment and wants
Making a plan for how to use your money, including how much to spend, save, and share
Keeping all of your money at home instead of in a bank
Borrowing money regularly to cover everyday expenses
Scenario: A small bank fails, and customers cannot get their money back.
Question: How does the FDIC protect customers in this situation?
It pays back all customers with no limit
It pays back customers up to $250,000
It prevents banks from ever failing
It gives customers loans to replace their money
Scenario: Jordan buys lunch at school and hands the cashier a $10 bill.
Question: What is Jordan using to pay?
Credit
Currency
Deposit
Check
Scenario: Sam wants to pay his landlord but doesn’t want to carry cash. He writes a slip instructing his bank to pay $800 to the landlord.
Question: What financial tool is Sam using?
Withdrawal
Deposit
Check
Credit
Scenario: Lina puts $200 into her savings account to keep it safe and earn interest.
Question: What action did Lina take?
Withdrawal
Deposit
Overdraft
Credit
Scenario: Chris goes to the ATM and takes out $40 in cash.
Question: What is Chris doing?
Deposit
Budgeting
Credit
Withdrawal
Scenario: Diego earns $1,000 a month. He spends $800 on needs and saves $200.
Question: What is Diego practicing?
Overdraft
Withdrawal
Living within his means
FDIC Protection
Scenario: Alex has $50 in his account. He uses his debit card to buy shoes for $70.
Question: What happens to Alex’s account?
He makes a deposit
He overdrafts and is charged a fee
He receives FDIC protection
He earns interest
