Banking: Checkpoint 1

Covers how banks work, choosing an account, and moving money between accounts.

Five questions on how banking actually works and what to look for in an account.

Question 1 of 5 When you deposit money in a bank, the bank primarily:

Keeps it in a vault untouched Lends most of it out to other customers Invests all of it in the stock market Sends it to the government

Question 2 of 5 APY differs from APR mainly because APY:

Is always lower than APR Includes the effect of compounding Only applies to loans Is set by the government

Question 3 of 5 FDIC insurance in the US protects deposits up to:

$10,000 per bank $100,000 per depositor total $250,000 per depositor, per bank There is no limit

Question 4 of 5 An 'overdraft fee' is charged when:

You open a new account You spend more than you have available You use an ATM You close an account early

Question 5 of 5 Compared to a commercial bank, a credit union is typically:

Owned by shareholders seeking profit Owned by its members Only available to businesses Not allowed to offer savings accounts

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