Which of the Following is NOT a Common Feature of a Financial Institution?
Answer : A. Paper checks B. Access to investment products C. Direct deposit D. Access to ATMAnswer: A. Paper checks
Detailed Explanation:
A financial institution is an entity that provides financial services such as banking, investments, loans, and payment processing. Common features of financial institutions include:
- Access to investment products (Option B) – Many banks and financial institutions offer investment services like mutual funds, stocks, bonds, and retirement accounts.
- Direct deposit (Option C) – This is a widely used service where salaries, government benefits, or other payments are electronically transferred into a customer’s account.
- Access to ATMs (Option D) – Most banks provide ATM services for cash withdrawals, deposits, and balance inquiries.
Why Are Paper Checks Not a Common Feature Anymore?
While paper checks were once a standard banking tool, they are becoming less common due to:
- Digital Payments: Online banking, mobile payments, and electronic fund transfers (EFT) have replaced the need for physical checks.
- Security Concerns: Paper checks can be lost, stolen, or forged, making them less secure than digital alternatives.
- Processing Time: Checks take longer to clear compared to instant digital transactions.
- Cost Inefficiency: Banks and businesses prefer electronic payments to reduce costs associated with printing and processing checks.
Conclusion:
Most financial institutions focus on digital banking and electronic transactions rather than paper checks. While some banks still provide checkbooks upon request, they are no longer a primary or common feature in modern financial services.
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