Financial Institutions & Checking and Savings Accounts Flashcard

Front

What is a financial institution (FI)?

Back

A company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.

Front

Which of the following is NOT listed as a type of financial institution in the provided material? Banks, Credit Unions, Retail Stores, Government Lenders

Back

Retail Stores

Front

Which of the following is a type of financial institution that deals with insurance?
Options:
Commercial Banks,
Insurance Companies,
Investment Companies,
Credit Unions

Back

Insurance Companies

Front

What is a bank?

Back

A financial institution licensed to receive deposits and make loans.

Front

Which of the following services is NOT typically provided by banks? Wealth management, Currency exchange, Safe deposit boxes, Medical services

Back

Medical services

Front

How do financial institutions make money?

Back

From the "spread" - the difference between the interest rate they pay for deposits and the interest rate they receive on the loans they make.

Front

Why do consumers look for a high interest rate on deposits?

Back

Because the higher the number, the higher the earnings

Front

Why do consumers look for a low interest rate on loans?

Back

Because the higher the number, the higher the payments will be on the loan

Front

What do savers provide to banks in the financial system?

Back

Deposits

Front

What do banks provide to borrowers in the financial system?

Back

Loans