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Banking Basics Flashcards
30 Questions
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Banking Basics Flashcards

Created by
@WellBlue

Questions and Answers

Which of the following is NOT a common feature of a financial institution?

  • Access to investment products
  • Investment trading
  • Access to investment advice
  • All of the above (correct)

    • Which of the following statements about check cashing companies is TRUE?

  • They are regulated by the government
  • They charge high fees (correct)
  • They do not charge fees
  • They offer competitive rates

    • Which of the following financial institutions typically have the highest fees?

  • Check cashing and payday loan companies (correct)
  • Credit unions
  • Standard banks
  • Savings banks

    • Which about check cashing companies is FALSE?

    <p>True</p> Signup and view all the answers

    Which type of bank account typically offers the least (if any) interest?

    <p>Checking Account</p> Signup and view all the answers

    Savings accounts typically offer more interest than what type of accounts?

    <p>Checking Accounts</p> Signup and view all the answers

    Which type of bank account is best for everyday transactions?

    <p>Checking Account</p> Signup and view all the answers

    A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily.

    <p>True</p> Signup and view all the answers

    Which savings account will earn you the most money?

    <p>One that compounds daily</p> Signup and view all the answers

    Which savings account will earn you the least money?

    <p>One that earns simple interest monthly</p> Signup and view all the answers

    Why is it important to reconcile your bank statements?

    <p>To avoid spending more than what's in your account, to detect any errors in your accounts, and to determine if you were charged any fees.</p> Signup and view all the answers

    How can you avoid spending more than what is in your bank account?

    <p>Keep your own records to compare with your financial institution's records.</p> Signup and view all the answers

    How could you reconcile your bank account to avoid spending more than you have?

    <p>Compare your own records of your spending with your financial institution's records.</p> Signup and view all the answers

    What should you do before you withdraw money from the ATM?

    <p>Inspect the ATM to make sure it wasn't tampered with.</p> Signup and view all the answers

    What should you do before you approach an ATM?

    <p>Check for any suspicious people lurking nearby.</p> Signup and view all the answers

    What should you do before you use an ATM?

    <p>Inspect the ATM and its surroundings to make sure it is safe to use.</p> Signup and view all the answers

    Which of the following statements about savings accounts is FALSE?

    <p>True</p> Signup and view all the answers

    Which of the following statements about savings accounts is FALSE?

    <p>True</p> Signup and view all the answers

    Which of the following statements about savings accounts is FALSE?

    <p>True</p> Signup and view all the answers

    If there is a mistake on your bank account, you should contact your financial institution immediately.

    <p>True</p> Signup and view all the answers

    If there is a mistake on one of your bank accounts, who should you contact to resolve the issue?

    <p>Your financial institution.</p> Signup and view all the answers

    If there is an issue with your bank statements or account balance, who should you contact to resolve the issue?

    <p>Your bank.</p> Signup and view all the answers

    Your financial institution can't help you if there is a mistake on your bank account statement.

    <p>False</p> Signup and view all the answers

    Which of the following statements about investing is TRUE?

    <p>True</p> Signup and view all the answers

    Investing is best for________.

    <p>long-term financial goals, like paying for retirement.</p> Signup and view all the answers

    Which of the following statements about investing is FALSE?

    <p>True</p> Signup and view all the answers

    A stock is______.

    <p>A share of ownership in a company.</p> Signup and view all the answers

    A _______ is a share of ownership in a company.

    <p>stock</p> Signup and view all the answers

    A mutual fund is ___________.

    <p>A type of investment that invests in a mix of different types of investments.</p> Signup and view all the answers

    Which of the following statements about stocks is TRUE?

    <p>True</p> Signup and view all the answers

    Study Notes

    Financial Institutions

    • Common features of financial institutions exclude access to investment products, trading, and investment advice.
    • Check cashing companies typically charge high fees.
    • Check cashing and payday loan companies usually have the highest financial fees.
    • Misconceptions about check cashing companies include the belief that they charge low fees.

    Bank Accounts

    • Checking accounts generally offer the least interest, if any.
    • Savings accounts yield more interest compared to checking accounts.
    • The best type of bank account for everyday transactions is a checking account.
    • A savings account that compounds interest daily will yield a higher return than one with simple interest.
    • The most profitable savings account is one that compounds interest daily, while the least profitable earns simple interest monthly.

    Account Management and Reconciliation

    • Reconciling bank statements is crucial to avoid overspending, detect errors, and identify potential fees.
    • Keeping personal records is advised to compare with bank records and avoid discrepancies.
    • It is important to check the ATM for tampering and survey the surroundings before approaching one.

    Savings Accounts Facts

    • Savings accounts have a limited number of withdrawals each month.
    • They often require a minimum balance.
    • Savings accounts typically pay interest on deposited funds.

    Error Resolution

    • Immediate contact with the financial institution is essential if a bank account mistake occurs.
    • The bank is the appropriate point of contact for issues regarding statements or account balances.
    • Misconceptions include the belief that financial institutions cannot assist with mistakes on account statements, which is false.

    Investing Basics

    • Investing involves greater risk compared to keeping money in savings accounts.
    • Best suited for long-term goals, such as retirement.
    • Investment growth is not guaranteed, contrary to a common misconception.
    • A stock represents ownership in a company.
    • A mutual fund is defined as an investment that includes a mix of various types of investments.

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    Description

    Test your knowledge of banking concepts with this flashcard quiz. Each card focuses on the common features of financial institutions, challenging you to identify which options are not typical. Prepare to enhance your understanding of banking fundamentals.

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