Financial Literacy 2 Banks

4.10C, 4.10E I can describe the basic purpose of financial institutions and the advantage and disadvantages of various savings options. 

​A place, such as a bank or credit union, which provides financial services (e.g., keeps money safe, borrows money, and lends money).

​​Financial Institution  

​To receive money from a financial institution or person with the intent of repaying the amount, usually with interest.

​​Borrow 

Lend

​To give money to a borrower with an expectation of repayment.

Multiple Choice

Customers can borrow money from a bank?

• True

• False

Multiple Choice

Customers can cash checks at a bank.

• True

• False

Multiple Choice

Customers can pick up a package at the bank.

• True

• False

Multiple Choice

Which of these services is not provided by a financial institution such as a bank or credit union?

• Informing customers of the amount of money in their accounts

• Informing customers of how the money is their accounts must be spent

• Providing cash when a customers make withdrawals from their accounts

• Providing loans to customers that can be paid back over time with interest

Multiple Choice

Which statement best describes a primary service of a bank?

• Bank offers checking and savings accounts to their customers.

• Banks help customers decide which expenses to pay.

• Banks help customers meet their neighbors.

• Banks sell stamps and deliver mail.

Multiple Choice

Mr. and Mrs. Troutman have been saving money for several years to purchase a new home. However, they do not have enough money to purchase one yet. How can a bank help the Troutmans to buy a new house?

• A bank can help them keep track of the money in their savings account.

• A bank can give them cash from their account to buy a house.

• A bank can provide them a loan that can be repaid with interest.

• A bank can help them meet their new neighbors.

Is a type of bank account that allows members of a financial institution to easily deposit and withdraw money for daily transactions, such as food and clothes.!

​​Checking account

​Is a type of bank account that allows members to save money for huge expenses or unexpected expenses. People often save to buy a new car, new home, or family vacation.   

​​Savings account

How does interest work?

Interest is calculated as a percentage.

​Interest when you save money

​Interest when you borrow money

• We know interest is money a bank gives you for keeping your money there. 

• The more money you have in the bank, the more extra money you receive.

• Interest can be also be accumulated when borrowing money from the bank. 

• The more money you borrow from an financial institution, the more money you have to pay back. 

Multiple Choice

When you want to save money what is a better choice?

• Save money in a bank

• Save money in a jar.

Multiple Choice

My house payment is the same every single month. This is an an example of a....

• profit

• variable expense

• fixed expense

Multiple Choice

Interest is better when you...

• save money

• borrow money