Exam 5: Banking Services and Managing Your Money

Because they have lower expenses, Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

You have $3000 that you may need to use to replace the furnace in your home any time in the next couple of years. If you need the funds, you would have a weeks notice. Which of the following would likely give you the best return for your $3000?

The type of financing that allows you to pay for a purchase directly from your chequing account without writing a cheque is

You have $5000 to invest for short-term liquidity needs (your emergency fund). Which of the following investments would be best?

Kelly deposits $1000 in a three year GIC compounding annually at 4 percent per year. How much interest would she earn by maturity?

You should have more funds in your chequing account than you need.

Which of the following does not guarantee payment to the payee?

In order to have a safety deposit box at a bank, a person needs to also maintain another chequing or savings account at that bank.

The key feature that makes Canada Premium Bonds better than Canada Savings Bonds is

Mortgage companies

Finance companies are more selective in choosing the borrower they serve, and therefore usually charge lower interest rates than banks or credit unions.

When purchasing a guaranteed investment certificate (GIC),

To prevent an overdraft or "bounced cheque," it is always a good idea to record your cheques written in your cheque register and reconcile your account balance when you receive your monthly bank statement.

Savings institutions differ from commercial banks in that they tend to focus less on providing commercial loans.

A type of cheque that is written on behalf of an individual and will be charged against a large well-known financial institution or credit card sponsor's account, but has no payee designated on the cheque is called a

It is illegal for a federally insured financial institution to charge those with poor credit higher interest rates than those with good credit.

The time between writing a cheque and when the bank deducts the money from your account is called "the float."

The Canada Deposit Insurance Corporation (CDIC)insures

Which of the following is classified as a non-depository institution?

Investment dealers sell insurance to protect individuals and assets from risk.