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1. What is one primary role of banks?
2. How does a bank reconciliation help an account holder?
1. To store and safeguard deposits
2.By ensuring their bank records match their own transaction records
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
1. What is interest?
2 . What is the primary purpose of a bank statement?
1. The cost (or income) of borrowing (from loaning) money
2. To outline all account transactions in a given month
Which of the following is a benefit of using a debit card?
Direct access to funds without carrying cash
How does the FDIC protect checking accounts?
Insures deposits up to $250,000 per unique depositor per insured bank
What is the primary way banks make money?
Charging interest on loans
What is a major benefit of credit unions compared to other financial institutions?
Higher interest rates on deposits
1. Which type of loan is NOT typically offered by banks?
2.Which of the following is NOT a fundamental element of a bank
1. Payday loans
2. Credit score
What information is required for a direct deposit to work?
Routing number and account number
1. What is liquidity?
2.What does NSF stand for in banking terms?
1. The ease and speed by which an asset can be converted into cash
2.Non-Sufficient Funds
What does FDIC insurance protect against?
Bank failures
What service is NOT typically provided by retail banks?
Investment banking
1. What type of account typically offers the most immediate access to funds?
2. Which of the following is NOT a reason for discrepancies between bank statements and check registers?
1. Checking Account
2. New check designs
How has online and mobile banking changed account management?
Provides instant access to account information
What fee is charged when an account holder spends more than is available in their account?
Overdraft fee
1. What type of account is most likely to earn interest?
2. How is the ending balance on a bank statement calculated?
1. Savings account
2. Beginning balance + Deposits - Withdrawals
1. Which type of bank is responsible for implementing monetary policy?
2. What does the statement period on a bank statement indicate?
1. Central bank
2. The time period being reported
Which feature is most commonly associated with a checking account?
Debit card
1. What is the function of online bill pay?
2. What does the term "canceled check " refer to?
1. Allows users to pay and manage their bills electronically
2. A check that has been processed and cleared by the issuing bank
What is required to open a checking account?
Government-issued photo ID, Social Security number, proof of address, initial deposit
1. What type of bank focuses on providing banking services to large businesses and corporations?
2. Which of the following statements is true about online banking and bank statements?
1. Commercial bank
2. Online banking provides real-time insight into transactions, reducing reliance on monthly statements
If a bank offers a 2% interest rate on savings accounts and charges 5% interest on personal loans, what is the bank's net interest margin?
3%
1. What is a check?
2. What is meant by "Deposits in Transit"?
1. A dated and signed form of payment instructing a bank to pay a specific amount
2. Deposits that have been recorded but not yet cleared by the bank
1. What is an ATM?
2. What could cause a bank balance and check register balance to not agree?
1. An electronic banking outlet for basic bank transactions
2.Outstanding checks
1. What is the primary trade-off of using a checking account?
2.What does NSF stand for in banking terms?
1. High liquidity vs low interest
2. Non-Sufficient Funds