Understanding Banks
What is the primary way banks make money?
Charging interest on loans
How does the FDIC protect checking accounts?
Insures deposits up to $250K per depositor
What is the main benefit of a savings account compared to a checking account?
Higher interest rates
What does the term Cancelled Check refer to?
Check that has been processed and cleared by the issuing bank
What are three consecutive strikes in bowling called?
Turkey
What does FDIC insurance protect against?
Bank Failures
The ease and speed to which an asset can be converted into cash
Liquidity
Why might a bank offer higher interest rates on deposits during periods of economic growth?
What is meant by Deposits in Transit?
Deposits that have been recorded but not yet cleared by a bank
What was the first Pixar movie?
Toy Story
What type of bank focuses on providing banking services to large businesses and corporations?
Commercial bank
What fee is charged when an account holder spends more than is available in their account?
Overdraft
What is the primary function of the Federal Reserve's discount rate?
To set the interest rate for banks borrowing short term funds
What causes a bank balance and check register balance to not agree?
Outstanding checks
In Back to the Future, what type of car is the time machine?
Which type of bank is responsible for implementing monetary policy?
Central Bank
What is the primary trade off when using a checking account?
High liquidity vs low interest
Which type of account typically has the highest interest rate?
What does NSF stand for in banking terms
Non Sufficient Funds
What is the name of Princess Leia's home planet in Star Wars?
Alderaan
What is the term for the difference between the interest banks earn on their loans and the interest banks pay to their depositors?
Net interest margin
What info is required for a direct deposit to work?
Routing and account #
What is a common limitation of both savings accounts and MMAs?
Limited number of withdrawals per month
How is the ending balance on a bank statement calculated?
Beginning balance + Deposits - withdrawals
In the United Kingdom, what is the day after Christmas Day called?
Boxing Day