LUOA PFL Module 2 Study Guide

The present limit for insuring any account at participating banks through the FDIC is ________________.

$250,000.00

Whats the correct form or document used for paying a bill?

Check

TSP

For people employed by the federal government

Most ATM's that accept debit cards for transactions also require you to enter your PIN as well. What is a PIN?

Personal Identification Number

What is the source of funding used by the FDIC to pay insured depositors of a failed bank?

Premiums already paid by insured banks and interest earnings on its investment portfolio of the U.S. Treasury security

Whats the correct form or document used for recording a deposit you just made at the bank yesterday?

Checkbook register

Whats the correct form or document used for recording a withdrawal using an ATM card?

Checkbook register

Whats the correct form or document used to record fees that were taken out of your account checkbook register

Checkbook register

People enjoy using online banking because it is ____________________.

Convenient and saves time

Whats the correct form or document used to hand it to the teller with cash and checks to deposit to your account

Deposit Slip

A is a piece of paper with blanks that is filled out when an account holder wants to deposit either checks or cash into his/her account.

Deposit slip

To make a deposit to a bank account, one uses a form called a ____________.

Deposit slip

Whats the correct form or document used for listing a check that you are depositing into your account?

Deposit slip

Whats the correct form or document used for listing cash that you are depositing into your account?

Deposit slip

Whats the correct form or document used to write the date and total of your deposit before handing it to the teller deposit slip?

Deposit slip

A direct withdrawal is an electronic transaction similar to direct deposit, except a direct deposit ________________________.

Deposits money into your account while a direct withdrawal takes money out of your account

To keep your account active, you will need to _______________.

Make deposits

Online financial services associated with a bank, credit union, or thrift may include which of the following services? Select all that apply.

-IRA (Individual Retirement Account) -Checking account -Certificate of Deposit (CD) -Credit lines -Bill paying options -Loans -Savings account -Debit cards

Whats the correct form or document used for buying groceries at the market?

Check

Even though we should be careful with our money and valuables, what does the Bible say about the things of this world and wealth?

-"Jesus said to the rich young ruler, "You lack one thing: go, sell all that you have and give to the poor, and you will have treasure in heaven; and come, follow me." -"Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal." -Matthew 6:19 -"But lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal." -Matthew 6:20 -"For where your treasure is, there your heart will be also." -Matthew 6:21

The Federal Reserve System was established in ________ and was the third attempt by the United States government to establish a central banking system. Unlike its two predecessors, the Federal Reserve System was not limited to a 20-year charter by the passing of the McFadden Act of 1927. The Banking Act of 1933 established the _________ to protect the deposits of consumers against bank failure. ________ financial institutions are members of the Federal Reserve System today.

-1913 -Third -20-year charter -Federal Deposit Insurance Corporation -Some

Choose all statements that describe a "thrift."

-A financial institution -Specializes in making money off of mortgages and personal loans to its members -A mutually held corporation with decisions made by depositors and borrowers -Also known as a savings and loan association -Limited by law as to the amount of assets it can use for commercial loans

Electronic banking or electronic funds transfer can include which of the following? Choose all that apply.

-ATM withdrawals -Using your personal computer to transfer money from your checking account to your savings account -Electronic check conversion at a store for payment for merchandise -Phone activated transfer from one account to another -Automatic insurance bill drafted off your account monthly -Direct deposit of your payroll to your bank account

What are the three main types of financial institutions available to help you manage your finances?

-Banks -Credit Unions -Thrifts

Online financial institutions offer all services that "brick and mortar" institutions offer, EXCEPT these:

-Branch manager offices to sit down and discuss your account in -A teller working at a walk-up office

A bank may need what three items or information from you in order to verify your identity? Choose the three best answers.

-Individual Taxpayer Identification Number -A photo identification (Like a drivers license)

Choose all statements that describe a "bank."

-Invests in capital markets to make money for the institution as well as its customers -A financial institution -Regulated by the government -Charges fees and interest to pay administrators and stock holders -Accepts deposits to accounts

There are several reasons why people should use a financial institution to help them with managing their money. Choose all valid reasons to have an account with a financial institution.

-It allows quick access to your money -You are insured against losses up to the federal maximum amount -It provides a safe place for your money -It helps with establishing credit and getting loans -It is cheaper than other possible alternatives

As a person applying for a new account, what should you do to make sure you are ready to approach a financial institution to open an account?

-Know how to balance a passport or checkbook -Have money or a check to make an initial deposit -Collect proper identification -Have good knowledge of the responsibilities of an account holder

What four responsibilities does the Federal Reserve System have that were also the responsibilities of its predecessors, the First and Second Bank of the United States? Choose all correct answers.

-Makes payments for the federal government -Acts as the federal government's fiscal agent -Receives revenues for the federal government -Holds deposits for the federal government

You can use your debit card to make purchases _____________________. Choose all correct responses.

-Over the phone -Online -In person at a store

Choose all statements that describe a "credit union."

-Provides services only to its members -Accepts deposits to accounts like a bank -Not for profit -Member-owned -Profits and surpluses go to pay administrators and provide services for members -A financial institution

A checkbook ______ is a page or booklet that has __________ for making entries similar to a ledger. As you write _______ or make __________________, you can keep up with transactions that affect your account balance.

-Register -Rows and columns -Checks -Withdrawals and deposits

A check linked to your banking account typically has what parts of information or features?

-Routing/transit number -Check number -Blanks for payment information -Financial institution name and number -Account number -Account holder's information

Choose all things the banking institution may require or review when setting up your account.

-Social Security number -Legal ability to open an account -A photo identification -Your credit history

The FDIC insures different kinds of accounts at participating financial institutions. Choose all of the accounts or investing programs that are covered by the FDIC.

-Statement savings accounts -Checking accounts -Money Market Deposit Accounts -Certificate of deposits (CDs) -Passbook savings accounts

In a financial institution that is federally insured, deposited money is safe from ____________________.

-Theft -Loss -Fire

Choose all the descriptors that tell about the functions and policies related to credit unions.

-They provide service to members only -Their profits and surpluses are used to pay for administrative costs and member services -They offer financial services similar to banks, but for members only -They are member owned and governed -They are not for profit

Financial institutions may charge certain operational fees to help defray the costs of doing business. Choose the fees listed below that are common to financial institutions.

-Transaction fees -Returned check fees -Overdraft fees -Non-sufficient funds fees -Minimum balance fees

Alexander Hamilton was the first Secretary of the ________ . He believed in a strong federal government with a centralized ___________. Hamilton's critics attacked him by stating that a central government-run bank would be ___________. The first Bank of the United States was a _________ institution and was owned by a majority (70%) of ______ investors.

-Treasury -Banking system -A monopoly and unconstitutional -Private -Foreign

What are some steps a bank may take before allowing someone to open an account with the bank? Choose all appropriate answers.

-Verify your identity -Review your use or history of previous checking accounts -Run a credit report on you -See your passport if you are a citizen of another country

What are some typical ways you can make withdrawals from a bank account?

-Withdraw cash at your local branch bank office -Use a debit card connected to your account to make purchases -Use paper checks to pay for purchases or bills

A transaction fee can be assessed against an account for the following transactions (choose all possible answers):

-Withdrawals over the maximum number allowed -Transfers to other accounts -Checks cashed off other bank accounts -Copies of bank statements -Deposits over the maximum number allowed

Because banks are federally regulated, there are certain guidelines that they have to follow. What are some of these guidelines? Choose all that apply.

-a bank has to maintain a certain ratio of how much it lends compared to its capital assets -A bank is regulated to make sure it does not lend more money than it can safely cover with assets and depositors' monies. -A bank is insured by the FDIC and must follow its guidelines in order for its depositors to be covered against loss -A bank has to have a minimum amount of capital holdings to do business -A bank has to abide by guidelines set up by the Federal Reserve System

Whats the correct form or document used for signing your name after writing payment information check?

Check

The Great Depression began with the stock market crash of _______.

1929

A debit card purchase is much like a credit card purchase except _____________________________.

A debit card purchase transfers money directly from your checking or savings account

Returned check fee

A fee charged when you deposit a check from someone that is returned because the check has insufficient funds

Transaction fee

A fee charged when you exceed a set number of transactions in a month for deposits or withdrawals

Minimum balance fee

A fee charged when you use an ATM out of your banks network

Wire transfer fee

A fee charged when you wire money from your account to someone else's account

Overdraft fee

A fee charged when you write a check and your account does not have enough money to cover the amount

Membership fee

A fee that a credit union charges its members to open an account

The first thing you need to do to open a bank account is to go through a process called ___________________.

Account verification

The first thing you need to do to open a new financial account is to go through a process called _____________________.

Account verification

The first Secretary of the Treasury of the United States was ____________________.

Alexander Hamilton

The Second Bank of the United States was established after the War of 1812. It was opposed by what president?

Andrew Jackson

Tax-deferred accounts _________________________.

Are taxed later when a person has retired and is in a lower tax bracket

Where are the safest places to keep your money until you need it?

Banks, credit unions, and thrifts

Banks are the only financial institutions available for people to keep their money in.

False, There are other financial institutions including credit unions and thrifts

The Banking Act of 1933 established the FDIC. The FDIC is the ___________________________.

Federal Deposit Insurance Corporation

Some financial institutions, especially banks, are members of the _____________________.

Federal Reserve System

IRA

For people who want to put their money into a tax-deferred account at a bank or through their employer

401 (k)

For people who work for public or private for-profit companies

457

For people who work for state or local governments, schools, and universities

403(b)

For people who work for tax-exempt or non-profit organizations

In the 1970's under the Carter administration, the United States was plagued with __________________.

High inflation and high unemployment

Since being created in 1933, the FDIC has caused participants to lose how much money?

No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933

If you are using your personal computer to carry out banking transactions, it is important that no one else knows your _____________.

Passwords

When you match all payments, deposits, and other transactions listed in your bank statement to your personal checkbook register, that process is called ______________ a bank statement.

Reconciling

Most people participate in tax-deferred savings and investments accounts for ______________________.

Retirement and travel

Before a bank completes processing your account, they may _________________.

Run a credit report

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: 401 (k) plan

Tax-deferred

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: 403 (b) plan

Tax-deferred

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: 457 Plan

Tax-deferred

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: Federal TSP (Thrift Savings Plan)

Tax-deferred

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: Roth IRA

Tax-deferred

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: Bond dividends

Taxed

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: CDs (Certificate of deposit)

Taxed

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: Money Market accounts

Taxed

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: Savings account

Taxed

For each type of investment or savings option listed, choose either taxed or tax-deferred depending on typical government and IRS regulations: Stock dividends

Taxed

A financial institution will check a person's background and other information because they want to make sure that _____________________________.

That person will be a responsible bank account customer

To help improve the United States economy after the stock market crash, President Franklin Roosevelt supported a plan referred to as ______________.

The "New Deal"

What is the FDIC?

The Federal Deposit Insurance Corporation is an independent federal agency created in 1933 to promote public confidence and stability in the nation's banking system

What event in American history had a profound effect on modern-day banking regulations and policy?

The Great Depression

The Consumer Credit Protection Act established provisions requiring lenders to provide information about credit terms and the cost of credit. These are known as ________________.

The Truth in Lending Act provisions

Once someone opens an account at a financial institution, who is responsible for keeping up with the account balance, any fees deducted from the account, and any deposits or withdrawals?

The person who opens/owns the account

When you pay for your purchases at a store and you use a check, why do they sometimes give you your check back instead of keeping it?

The store used an EFT system to automatically withdraw the money from your account

Why are financial institutions safe places to keep your money?

They are regulated by federal guidelines and are in business to make money for their depositors, members, and/or stockholders.

Can a financial institution decide to close your account once it is open?

Yes, If you do not follow the rules presented to you upon opening your account

Instead of an annual fee, most credit unions assess a one-time _______________which is usually accepted as the first deposit and is refunded when closing the account.

membership fee

When you require a wire transfer of money from your account to another person's account, your bank may charge you a _________________.

wire transfer