4.10E Financial Institutions

Front

What is a bank?

Back

A bank is a financial institution that keeps money safe, allows people to deposit money, and lends money to individuals and businesses.

Front

Why do people deposit money in banks?

Back

People deposit money in banks to keep their money in a safe place.

Front

What do banks do with the money they receive from deposits?

Back

Banks lend money to people and businesses, and they pay interest to the depositors.

Front

What is interest?

Back

Interest is the extra money paid to a bank for borrowing money or the money earned on deposits.

Front

What is a loan?

Back

A loan is money borrowed from a bank that must be paid back with interest.

Front

What type of institution lends money for buying a car?

Back

A bank is the type of institution that lends money for buying a car.

Front

What is the role of an insurance company?

Back

An insurance company provides financial protection against risks, such as accidents or health issues, but does not primarily lend money.

Front

What is a financial institution?

Back

A financial institution is an organization that provides financial services, such as banks, credit unions, and insurance companies.

Front

What happens when you borrow money from a bank?

Back

When you borrow money from a bank, you agree to pay it back with interest over a set period.

Front

What is a deposit?

Back

A deposit is money placed into a bank account for safekeeping.