Most of us feel very comfortable knowing that our hard-earned money is in the bank, safe and secure. But sometimes a bank can fail. What happens then? If the bank is insured with the FDIC, you can rest assured that your money will not be lost. Take this quiz and find out how and why your funds are safe in an FDIC-insured bank.
What is IndyMac?
a corporate merger of McDonald’s and the Indy 500
a US bank that had financial trouble
a popular new Big Mac made with curry
In general, what happens to the money that you deposit in a bank?
It sits safely in a vault.
It is invested in high-risk financial vehicles.
It is invested and loaned out.
When did the US government begin to insure banks?
in the 1920s
in the 1930s
in the 1960s
What is a bank run?
a campaign to advertise the opening of a new bank
a marathon to raise funds for a new bank
a rush to withdraw money from a bank
Who offered the United States the New Deal?
Franklin D. Roosevelt
What is the FDIC?
Federal Deposit Insurance Corporation
Federated Departments of Insurance Claims
Federal Department of Insufficient Collateral
What is a recession?
a bank closure
an interim when a bank takes a break to get back on its feet
a period of economic difficulty
If your bank is insured with the FDIC, what happens if the bank closes down?
You get your money back.
You have to make an insurance claim to the government.
You lose your savings.
Who pays the insurance premiums to the FDIC?
How can the FDIC afford to pay back the clients in the case of a bank closure?
It borrows money from the US Treasury.
It uses the profits from its high-risk investments.
It uses the money from the insurance premiums.
What is a conservatorship?
the helpful takeover of a failed bank
the smooth running of a successful bank
the moderate savings plan of a bank client
What happens during a conservatorship?
All bank transactions are suspended.
The bank operates normally
People panic and try to take out their money.
What does the FDIC do after it takes over a failed bank?
It sells it to another bank.
It operates the bank until it gets back on its feet.
It puts the bank up for auction.
During the transition period from a failed bank to the new one, where do direct deposits go?
to the old bank
to the FDIC
to the new bank
What happens if the FDIC can’t immediately find a bank to purchase the failed one?
The FDIC sends each client a check to cover his/her losses.
The clients lose their money.
The clients have to wait until the FDIC finds one.
How much does the FDIC insure each depositor?
up to $50,000
up to $100,000
up to $250,000
How much will the FDIC give back if you have less than the maximum insured amount in your account in a failed bank?
all your money
the full maximum insured amount
half your money
Which one of the following is NOT covered by the FDIC insurance?
money market accounts
How can you insure more money than the maximum amount the FDIC insurance covers?
You can spread your funds among different banks.
You can register with a private insurance company.
You can file a special IHMM (I Have More Money) application with the FDIC.