Emma is ready to open a new checking account and is trying to decide between three banks using the chart below:

Question

Bank R
Bank S
Bank T
No monthly fees if balance stays above $300, otherwise $7 per month
No monthly fees if check card is used more than 6 times per month, otherwise $10 monthly fee
$5 monthly fee
No minimum balance
$25 minimum balance
No minimum balance
Online banking services
Online banking services
No online banking options
Non-Bank R ATM fee - $2.00 per transaction
Non-Bank S ATM fee - $1.50 per transaction
Non-Bank T ATM fee - $2.00 per transaction

Emma usually has about $1000 in her account at any given time during the month. She usually visits the ATM twice a week and is interested in banking online options. Bank R has 10 ATMs within a 5 mile radius of Emma’s home. Bank S has 1 ATM 10 miles from Emma’s work. Which bank should she choose?
a.
Bank R
b.
Bank S
c.
Bank T
d.
Bank R and S

Answer 1

To help Emma choose the best bank, let's summarize the fees and services offered by each option based on her preferences and typical banking habits:

Bank R

• Monthly Fees: $0 if balance is above $300 (which it is, as it's usually around $1000); otherwise, $7.
• Minimum Balance: None.
• Online Banking: Yes.
• ATM Fees: Non-Bank R ATM fee - $2.00 per transaction.
• Convenient ATMs: 10 ATMs within a 5-mile radius.

Bank S

• Monthly Fees: $0 if check card is used more than 6 times per month; otherwise, $10.
• Minimum Balance: $25.
• Online Banking: Yes.
• ATM Fees: Non-Bank S ATM fee - $1.50 per transaction.
• Convenient ATMs: 1 ATM 10 miles from Emma's work.

Bank T

• Monthly Fees: $5 (regardless of balance).
• Minimum Balance: None.
• Online Banking: No.
• ATM Fees: Non-Bank T ATM fee - $2.00 per transaction.
• Convenient ATMs: Not specified.

Emma's Banking Habits

• Account Balance: Usually around $1000, which helps her avoid monthly fees at Bank R and Bank S.
• ATM Visits: 2 times a week = 8 times a month.
• Online Banking: Interested in having online banking options.

Cost Analysis of ATM Fees

• Bank R: 8 transactions × $2.00 = $16.00
• Bank S: 8 transactions × $1.50 = $12.00
• Bank T: 8 transactions × $2.00 = $16.00

Conclusion

• Bank R would have a $0 monthly fee due to the high balance, but with ATM fees, Emma would incur $16.00 monthly.
• Bank S would also have a $0 monthly fee due to maintaining a balance above $25, with ATM transaction fees totaling $12.00 monthly (the cheapest option).
• Bank T has a monthly fee ($5) and doesn’t offer online banking, making it less desirable compared to Banks R and S.

Considering all the factors—monthly fees, ATM charges, online banking options, and ATM convenience—Bank S is the best choice for Emma. Therefore, the correct answer is:

b. Bank S.