Financial Literacy: Comparing Checking Accounts and Fees
Practice choosing checking accounts by comparing costs, requirements, and features
Financial Literacy: Comparing Checking Accounts and Fees
Practice choosing checking accounts by comparing costs, requirements, and features
Financial Literacy - Grade 9-12
- 1
Bank A charges a $6 monthly maintenance fee unless the account holder keeps at least $500 in the account. Maya's balance stayed above $500 for 8 months and below $500 for 4 months. How much did she pay in monthly maintenance fees for the year?
Only count the months when her balance was below $500.
Maya paid fees for 4 months. At $6 per month, she paid 4 × $6 = $24 in monthly maintenance fees for the year. - 2
Compare these two checking accounts for one month. Account A has no monthly fee but charges $3 for each out-of-network ATM use. Account B has a $5 monthly fee but charges $1 for each out-of-network ATM use. If Jordan uses an out-of-network ATM 4 times, which account costs less for the month?
Account A costs 4 × $3 = $12. Account B costs $5 + 4 × $1 = $9. Account B costs less for the month. - 3
A checking account charges a $35 overdraft fee each time a transaction is approved when there is not enough money in the account. Taylor had 2 overdrafts in March. How much did Taylor pay in overdraft fees?
Multiply the number of overdrafts by the fee per overdraft.
Taylor paid 2 × $35 = $70 in overdraft fees in March. - 4
A student checking account charges no monthly fee and includes 3 free out-of-network ATM withdrawals per month. After that, each out-of-network ATM withdrawal costs $2.50. If Priya makes 7 out-of-network ATM withdrawals in one month, how much does she pay in ATM fees?
Priya pays for 7 - 3 = 4 withdrawals. At $2.50 each, she pays 4 × $2.50 = $10 in ATM fees. - 5
Account C charges a $10 monthly fee. The fee is waived if the account holder receives at least $1,000 in direct deposits during the month. In April, Luis received direct deposits of $650 and $425. Was the monthly fee waived? Explain.
Add the direct deposits before comparing the total to the requirement.
Yes, the monthly fee was waived. Luis received $650 + $425 = $1,075 in direct deposits, which is more than the $1,000 requirement. - 6
Nia is choosing between two checking accounts. Account X has a $4 monthly fee and unlimited free debit card transactions. Account Y has no monthly fee but charges $0.25 for each debit card transaction after the first 20 transactions. Nia makes 36 debit card transactions in a month. Which account costs less?
Account X costs $4. Account Y charges for 36 - 20 = 16 transactions, so it costs 16 × $0.25 = $4. Both accounts cost the same for the month. - 7
A bank advertises a checking account as free, but it charges $3 for paper statements each month. If a customer chooses paper statements for a full year, what is the yearly cost of the paper statement fee?
There are 12 months in one year.
The yearly cost is 12 × $3 = $36. Even though the account is advertised as free, the paper statement option costs $36 per year. - 8
Sasha has an average balance of $300. She is comparing two accounts. Account A has a $7 monthly fee with no minimum balance requirement. Account B has no monthly fee if the balance stays above $400, but charges $9 for any month below $400. Based only on monthly fees, which account is better for Sasha if her balance stays around $300 all year?
Account A is better for Sasha. Since her balance stays below $400, Account B would cost $9 per month, while Account A costs $7 per month. - 9
A checking account has a $12 monthly maintenance fee. The fee can be waived by meeting one of these conditions: keep a $1,500 minimum daily balance, receive $500 in monthly direct deposits, or be under age 18. Marcus is 17, has a balance of $200, and has no direct deposit. Does he pay the monthly fee? Explain.
Look for any one condition that Marcus meets.
Marcus does not pay the monthly fee because he is under age 18. He only needs to meet one of the listed conditions to have the fee waived. - 10
A customer uses a non-bank ATM that charges a $2.75 machine fee. The customer's own bank also charges a $2.50 out-of-network ATM fee. What is the total cost of this ATM withdrawal?
The total cost is $2.75 + $2.50 = $5.25. The customer pays both the machine fee and the bank's out-of-network fee. - 11
Elena is comparing accounts for one year. Account A charges $8 per month. Account B charges $2 per month plus an annual debit card fee of $25. Which account has the lower yearly cost?
Convert each monthly fee to a yearly cost before comparing.
Account A costs 12 × $8 = $96 per year. Account B costs 12 × $2 + $25 = $49 per year. Account B has the lower yearly cost. - 12
A bank charges $30 for each overdraft, but it limits overdraft fees to 3 per day. On one day, Andre had 5 overdraft transactions. What is the maximum overdraft fee he could be charged for that day?
Andre can be charged for at most 3 overdrafts because of the daily limit. The maximum fee is 3 × $30 = $90. - 13
Riley is choosing a checking account. Account P has a $5 monthly fee, no ATM fees at any ATM, and a $35 overdraft fee. Account Q has no monthly fee, $3 out-of-network ATM fees, and a $25 overdraft fee. In a typical month, Riley uses an out-of-network ATM twice and has no overdrafts. Which account costs less in a typical month?
Use Riley's typical behavior and ignore fees that do not apply.
Account P costs $5. Account Q costs 2 × $3 = $6. Account P costs less in a typical month if Riley has no overdrafts. - 14
A checking account requires a minimum opening deposit of $100. It also has a $6 monthly fee unless the balance stays above $250. Is the minimum opening deposit the same as the minimum balance needed to avoid the fee? Explain.
No, the minimum opening deposit is not the same as the minimum balance needed to avoid the fee. The account can be opened with $100, but the balance must stay above $250 to avoid the $6 monthly fee. - 15
Create a recommendation for this situation: A high school senior wants a checking account with low costs. They expect to keep about $150 in the account, use mobile banking, avoid overdrafts, and use an out-of-network ATM once per month. Account A has no monthly fee, free mobile banking, and a $3 out-of-network ATM fee. Account B has a $10 monthly fee unless the balance is at least $500, free mobile banking, and no ATM fees. Which account should they choose and why?
Compare the costs that are most likely to happen for this student's habits.
They should choose Account A. With a $150 balance, Account B would likely charge the $10 monthly fee, while Account A would only cost about $3 per month for one out-of-network ATM use. Account A better matches their low balance and low-cost needs.