1.01 Evaluating Banking Services

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Banking Services

Answer the following questions about banking services.

1. What is the amount the FDIC insures deposits in a commercial bank or credit union?
   1. Anything over $250,000, but nothing below $250,000
   2. Up to $250,000
   3. The amount is unlimited
   4. Up to $100,000
   
   Answer: B. The FDIC insures deposits up to $250,000.



2. Credit unions usually pay a _____ interest rate on savings account and charge a _____ interest rate on loans than a commercial bank.
   1. lower ; higher
   2. lower ; lower
   3. higher ; higher
   4. higher ; lower
   
   Answer: D. Credit unions usually pay higher interest rates on savings accounts and charge a lower interest rate on loans than commercial banks.



3. Which of the following is an example of a payment service?
   1. checking account
   2. credit card
   3. money market account
   4. mortgage
   
   Answer: A. A checking account is an example of a payment service.



4. Which of the following is an example of a savings service?
   1. checking account
   2. credit card
   3. money market account
   4. direct deposit
   
   Answer: C. A money market account is an example of a savings service.



5. Which of the following is an electronic banking service?
   1. checking account
   2. credit card
   3. money market account
   4. direct deposit
   
   Answer: D. Direct deposit is an example of an electronic banking service.



6. Which of the following is NOT an example of an electronic banking service?
   1. ATM machines
   2. credit card
   3. Internet banking
   4. direct deposit
   
   Answer: B. Credit cards are not an example of an electronic banking service.



7. Which of the following is NOT an example of a loan service?
   1. automobile loan
   2. credit card
   3. checking account
   4. mortgage
   
   Answer: C. Checking accounts are not an example of a loan service.



8. Which of the following is NOT an example of a savings service?
   1. traditional savings account
   2. credit card
   3. money market account
   4. certificate of deposit
   
   Answer: B. Credit Card accounts are not an example of a savings service.



9. Who owns a bank?
   1. the customers of the bank
   2. the members
   3. the US government
   4. shareholders
   
   Answer: D. The shareholders own a bank.



10. Who owns a credit union?
    1. the creditors
    2. the members of the credit union
    3. the US government
    4. shareholders
    
    Answer: B. The members of the credit union are also the owners. That is why credit unions often pay higher interest rates on savings accounts.



11. How old must you be in Alabama to open a checking or savings account without someone to co-sign with you?
    1. 16
    2. 17
    3. 18
    4. 19
    
    Answer: D. In Alabama, you must be 19 years old to open a bank account without a co-signer.



12. Which of the following is not insured by FDIC insurance?
    1. certificates of deposit
    2. traditional savings accounts
    3. mortgages
    4. money market accounts
    
    Answer: C. The FDIC does not insure mortgages. It does insure money market accounts, traditional savings accounts, and certificates of deposit.

You've completed this review of banking services! If you missed more than 2 questions, go back and review the lesson before continuing.