Basic Banking Functions And Terms! Trivia Quiz

2.

A restriction that freezes an account, or restricts payment in another form (such as preventing members for having full access to a check they just deposited).

Maturity
Hold
MICR
Stop and Freeze

Correct Answer

A. Hold

Explanation

A hold is a restriction that prevents a person from accessing funds in their account or restricts the use of a payment method. It can be placed on an account for various reasons, such as to verify a check's authenticity or to prevent fraudulent activity. During a hold, the account holder may not be able to withdraw or use the funds until the hold is lifted.

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3.

This was developed by the ABA and it allows for the electronic reading of pre-coded numbers printed on documents (like checks). It uses a special magnetic ink.

CRIM
MMCA
MICR
CU

Correct Answer

A. MICR

Explanation

MICR stands for Magnetic Ink Character Recognition. It is a technology developed by the ABA (American Bankers Association) that allows for the electronic reading of pre-coded numbers printed on documents, such as checks. This technology uses a special magnetic ink that can be easily read by magnetic scanners, making it efficient and accurate for processing large volumes of checks and other financial documents.

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4.

MLCU has this many locations.

3
4
5
6

Correct Answer

A. 6

Explanation

The correct answer is 6 because the question asks for the number of locations that MLCU has, and out of the given options, 6 is the highest number.

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5.

This allows members to purchase goods and services as credit.

Debit card
Credit card
Savings account
Checking account

Correct Answer

A. Credit card

Explanation

A credit card allows members to purchase goods and services on credit, meaning they can make purchases without immediately paying for them. The cardholder can borrow money from the credit card issuer up to a certain credit limit and is required to make regular payments to repay the borrowed amount. This feature of a credit card distinguishes it from a debit card, savings account, or checking account, as none of these options provide the same ability to make purchases on credit.

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6.

"Not for profit, not for charity, but for service" is the philosophy of credit unions.

True
False

Correct Answer

A. True

Explanation

The statement "Not for profit, not for charity, but for service" accurately captures the philosophy of credit unions. Unlike traditional banks, credit unions are member-owned financial cooperatives that prioritize serving their members' best interests rather than maximizing profits. This philosophy is reflected in their lower fees, competitive interest rates, and personalized customer service. By operating on a not-for-profit basis, credit unions are able to reinvest their earnings back into the organization to benefit their members and the community. Therefore, the given answer "True" is correct.

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7.

A financial institution which is for-profit and traditionally specializes in servicing the needs of businesses.

Credit Union
Cash Advance Centers
Bank
Grocery Store

Correct Answer

A. Bank

Explanation

A bank is a financial institution that is for-profit and specializes in servicing the needs of businesses. Banks provide a wide range of services such as loans, deposits, and investment opportunities to help businesses manage their finances. They play a crucial role in the economy by facilitating transactions and providing financial services to individuals and businesses.

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8.

The federal agency for credit unions which insure member accounts up to $250,000 per account ownership

NCUA
FDIC
CUNA
FDCU

Correct Answer

A. NCUA

Explanation

The correct answer is NCUA. NCUA stands for National Credit Union Administration, which is the federal agency responsible for regulating and overseeing credit unions in the United States. One of their main functions is to insure member accounts in credit unions, providing protection for deposits up to $250,000 per account ownership.

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9.

A sum of money that is borrowed by a member and typically paid back in increments, such as monthly payments, until the balance is paid off in full.

Loan
Borrow Cash
Lump Sum
Lien

Correct Answer

A. Loan

Explanation

A loan is a sum of money that is borrowed by a member and typically paid back in increments, such as monthly payments, until the balance is paid off in full. It is a financial arrangement where one party lends money to another party, usually with the expectation that it will be repaid with interest over a specified period of time. Loans are commonly used for various purposes such as buying a house, financing education, or starting a business.

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10.

A financial institution which is not-for-profit and whose members appoint board members, who serve an unpaid persons.

Bank
Cash Advance Center
Credit Union
Grocery Store

Correct Answer

A. Credit Union

Explanation

A credit union is a financial institution that operates on a not-for-profit basis and is owned by its members. The members of a credit union appoint board members who serve voluntarily and without compensation. This structure allows credit unions to prioritize the needs and interests of their members, offering them better rates and services compared to traditional banks. Unlike banks, credit unions are focused on serving their members rather than maximizing profits. Therefore, the correct answer is Credit Union.

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11.

A member has an established certificate of deposit (CD) account locked in for an 18 month term. She/he is allowed to deposit money into the CD at any time during this term.

True
False

Correct Answer

A. False

Explanation

The explanation for the correct answer, which is False, is that a certificate of deposit (CD) is a fixed-term investment where the money is locked in for a specific period, in this case, 18 months. The member is not allowed to deposit additional money into the CD during this term.

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12.

Traditional IRA accounts require members to make yearly withdrawals at the age of 70 1/2.

True
False

Correct Answer

A. True

Explanation

Traditional IRA accounts require members to make yearly withdrawals at the age of 70 1/2. This is because the IRS mandates that individuals with traditional IRA accounts must start taking required minimum distributions (RMDs) from their accounts by April 1st of the year following the year they turn 70 1/2. These RMDs are taxable and help ensure that individuals use their retirement savings for retirement purposes rather than leaving it untouched indefinitely. Therefore, the statement "True" is correct.

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13.

Money market accounts differ from certificate of deposits (CDs) because members can deposit money into the account at any time.

True
False

Correct Answer

A. True

Explanation

Money market accounts are a type of savings account that typically offer higher interest rates compared to regular savings accounts. One key feature that sets them apart from certificate of deposits (CDs) is the ability for members to deposit money into the account at any time. Unlike CDs, which have fixed terms and do not allow additional deposits after the initial investment, money market accounts provide flexibility for members to add funds as needed while still earning competitive interest rates. Therefore, the statement "Money market accounts differ from certificate of deposits (CDs) because members can deposit money into the account at any time" is true.

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14.

MLCU employees uses MVI as our "electronic filing cabinet"

True
False

Correct Answer

A. False

Explanation

We use laserfiche as our filing cabinet. MVI is used to sign documents electronically and make electronic annotations

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Basic Banking Functions And Terms! Trivia Quiz

_______ is the date stated on an account signifying the end of the term.

Quiz Preview

A restriction that freezes an account, or restricts payment in another form (such as preventing members for having full access to a check they just deposited).

This was developed by the ABA and it allows for the electronic reading of pre-coded numbers printed on documents (like checks). It uses a special magnetic ink.

MLCU has this many locations.

This allows members to purchase goods and services as credit.

"Not for profit, not for charity, but for service" is the philosophy of credit unions.

A financial institution which is for-profit and traditionally specializes in servicing the needs of businesses.

The federal agency for credit unions which insure member accounts up to $250,000 per account ownership

A sum of money that is borrowed by a member and typically paid back in increments, such as monthly payments, until the balance is paid off in full.

A financial institution which is not-for-profit and whose members appoint board members, who serve an unpaid persons.

A member has an established certificate of deposit (CD) account locked in for an 18 month term. She/he is allowed to deposit money into the CD at any time during this term.

Traditional IRA accounts require members to make yearly withdrawals at the age of 70 1/2.

Money market accounts differ from certificate of deposits (CDs) because members can deposit money into the account at any time.

MLCU employees uses MVI as our "electronic filing cabinet"