Topic Test

Question 99 • 26-27 Ignite Technical Math-Financial Math - MA2007

Why is it important to choose a bank that is a member of the FDIC?

Answer

The FDIC is the regulatory body that licenses banks, so a non-FDIC bank is illegal.

The FDIC is a union that prevents banks from taking advantage of customers, so you will receive better service with an FDIC bank.

The FDIC is a government bureau that insures the money that customers deposit in the bank, so your money is safer in an FDIC bank.

Only FDIC banks are legally allowed to issue loans, so if you ever anticipate needing a loan, you will need to use an FDIC bank.

Explanation

The FDIC insures deposits at member banks, generally up to applicable legal limits, if the bank fails. That insurance helps protect customers’ deposited money. The FDIC does not license all banks, act as a customer-service union, or restrict loan-making to member banks, so the correct choice is “The FDIC is a government bureau that insures the money that customers deposit in the bank.”

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