Banking Basics
What is a financial institution?
An organization that provides financial services to individuals and businesses.
Which financial institution is member-owned and not-for-profit?
Credit union.
Your employer automatically sends your paycheck directly into your bank account. What banking service is being used?
Direct deposit.
Your bank charges you for using a certain ATM. What fee is this?
ATM fee.
What is a cognitive bias?
A mental shortcut or pattern of thinking that can influence decisions.
Which type of account is primarily used for everyday spending, paying bills, and debit card purchases?
Checking account.
Which type of bank generally operates without traditional physical branches and allows customers to manage their money online?
Online-only bank.
You are at a store and purchase shoes using money directly from your bank account. What are you most likely using?
Debit card.
Your bank charges you a recurring fee just for maintaining your account. What fee is this?
Monthly maintenance fee.
Everyone at school is buying the same expensive shoes, so you decide you need them too because “everyone else has them.”
Which bias is this?
Herd mentality.
Which type of account is generally used to set money aside for emergencies and future goals?
Savings account.
Which type of bank focuses on serving a local community or region?
Community bank.
You need $20 in cash. Which banking service could you use to withdraw it?
ATM.
Your bank requires you to keep a certain amount of money in your account, but your balance falls below that amount. What fee might you be charged?
Minimum balance fee.
A jacket was originally listed for $200 and is now $120. You immediately think $120 is an amazing price because you keep comparing it to the original $200.
Which bias is affecting your thinking?
Anchoring.
TRUE OR FALSE: Mobile banking is a type of financial institution.
False. Mobile banking is a way to ACCESS a financial institution.
Riley travels frequently and wants access to many locations and a large ATM network. Which type of financial institution might be a good fit?
National bank.
You want to check and manage your bank account using an app on your phone. What service are you using?
Mobile banking.
You make a purchase, but there isn't enough available money in your account to cover the transaction. What fee could occur?
Overdraft fee.
You already believe a certain product is the best one to buy, so you only look at positive reviews and ignore reviews that disagree with you.
Which bias is this?
Confirmation bias.
A student gets their first job. They need somewhere for their paycheck to go and money for everyday purchases, but they also want to save $100 each month for a future car.
Which TWO accounts would be useful, and what would each be used for?
Checking for the paycheck/everyday spending and savings for setting aside money for the car.
Morgan wants a financial institution that traditionally focuses on savings and home loans. Which type should Morgan consider?
Savings & Loan Association.
Your electric bill is due, and you want to send the payment directly through your bank. Which banking service could you use?
Bill pay.
Your checking account starts with $500. You spend:
What is your new balance?
$335
You have the choice between receiving a smaller reward right now or waiting to receive a larger reward later, but you choose the smaller immediate reward.
Which bias does this demonstrate?
Present bias.