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You are trying to decide which bank to start an account at. You pull up a website that compares two of the most popular banks in your area. The chart on the site looks like this.

Institution Account Maintenance Fee Minimum Monthly Deposit Overdraft Fees
Bank A $5.00 per month $100 per month $45
Bank B none $500 per month $30
Which of the following statements is true when comparing these two banks?

Statement 1: Bank A has lower fees and a lower minimum monthly deposit.
Statement 2: Bank A has higher fees but a lower minimum monthly deposit.
Statement 3: Bank B has lower fees and a lower minimum monthly deposit.
Statement 4: Bank B has higher fees and a higher minimum monthly deposit.(1 point)

1 answer

Let's analyze the information provided about the two banks:

  • Bank A:

    • Account Maintenance Fee: $5.00 per month
    • Minimum Monthly Deposit: $100 per month
    • Overdraft Fees: $45

  • Bank B:

    • Account Maintenance Fee: none
    • Minimum Monthly Deposit: $500 per month
    • Overdraft Fees: $30

Now, let's evaluate the statements:

  1. Statement 1: Bank A has lower fees and a lower minimum monthly deposit.

    • This is false because while Bank A has a fee ($5.00) and a lower minimum deposit ($100) compared to Bank B's minimum deposit, Bank B has no maintenance fees at all, which is lower overall.

  2. Statement 2: Bank A has higher fees but a lower minimum monthly deposit.

    • This is true. Bank A has a $5.00 monthly fee (which is higher than Bank B's fee of none), but it requires a lower minimum monthly deposit of $100 compared to Bank B's $500.

  3. Statement 3: Bank B has lower fees and a lower minimum monthly deposit.

    • This is false. Bank B has no fees, but it has a higher minimum monthly deposit requirement.

  4. Statement 4: Bank B has higher fees and a higher minimum monthly deposit.

    • This is false as well. Bank B does have a higher minimum monthly deposit ($500), but it does not have higher fees since it has no maintenance fees.

Given this analysis, the correct answer is:

Statement 2: Bank A has higher fees but a lower minimum monthly deposit.