Banking Concepts Quiz

What is the main goal of a for-profit financial institution?

• To provide payment services for banks

• To offer not-for-profit financial services

• To make a profit for shareholders

• To provide services to its customers

Which agency provides deposit insurance for deposits in insured banks?

• National Credit Union Administration

• Safe and Secure

• Federal Reserve System

• Federal Deposit Insurance Corporation

What is the main purpose of an emergency fund?

• To invest in the stock market

• To have quick access to cash for unexpected expenses

• To pay off debts

• To earn interest on savings

What is the main difference between a bank and a credit union?

• A credit union is not open to the general public

• A bank is not-for-profit

• A credit union is for-profit

• A bank is not open to the general public

What is the purpose of overdraft protection on a financial account?

• To provide higher interest rates

• To charge a fee for overdrafts

• To limit the number of transactions

• To link the account to another account for transactions

What is the main purpose of a money market account?

• To have no restrictions on transactions

• To offer unlimited transactions

• To provide lower interest rates than savings and checking accounts

• To provide higher interest rates than savings and checking accounts

What is the main purpose of a certificate of deposit (CD)?

• To have no minimum balance requirement

• To earn a specific interest rate for a stated period of time

• To provide unlimited withdrawals

• To offer lower interest rates than savings accounts

What is the main purpose of a checking account?

• To earn interest on deposits

• To provide easy access to funds

• To save money for future use

• To invest in the stock market

What is the main purpose of a savings account?

• To provide a higher interest alternative for a stated period of time

• To invest in the stock market

• To earn interest on deposits

• To have no minimum balance requirement

What is the main function of the Federal Reserve System?

• To provide payment services for banks

• To supervise and regulate financial institutions

• Responsible for US monetary policy

• All of the above