Chapter 3 Check for Understanding

The FDIC and NCUA guarantee depositors’ savings in most financial institutions up to a set limit of $_______ per depositor per ownership category.

• 250,000

• 100,000

• 500,000

• 1,000,000

When choosing a financial institution, it is important to check if the bank is _______ to ensure your savings are protected.

• insured

• uninsured

• unprotected

• unsecured

To find out more about a financial institution, you can view their _______, search for expert reviews online, visit a branch, or ask family members and friends for their recommendations.

• website

• menu

• catalog

• brochure

The FDIC stands for _______ _______ _______ _______.

• Federal Deposit Insurance Corporation

• Federal Deposit Investment Corporation

• Federal Deposit Insurance Company

• Federal Deposit Investment Company

The NCUA stands for _______ _______ _______ _______.

• National Credit Union Administration

• National Credit Union Association

• National Cooperative Union Administration

• National Creditors Union Association

What is a key feature of a checking account?

• High interest rates

• Ability to write checks and use debit cards

• Fixed term deposits

• Limited access to funds

Why might someone choose a checking account over a savings account for daily transactions?

• Higher interest rates

• More convenient for paying bills and making purchases

• Longer withdrawal times

• Higher minimum balance requirements

Which of the following is NOT a common way to access funds in a checking account?

• Writing checks

• Using debit cards

• Paying online

• Investing in stocks

Why do checking accounts usually not pay interest?

• They are designed for frequent transactions

• They have high minimum balance requirements

• They are only for business use

• They are not insured

How can using a checking account be safer than carrying cash?

• It earns interest

• It provides a record of transactions and reduces the risk of loss or theft

• It has higher fees

• It requires a credit check