Banking Unit Test Personal Financial Literacy FHS

Juan saved $1000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?

• regular savings account

• money market account

• checking account

• certificate of deposit

Which of the following is an effective strategy for personal saving?

• Wait until the end of the month and save whatever is left in your checking account

• Save a certain percentage of each paycheck and deposit it directly into a savings account

• Cover all of your wants and needs and save whatever is left over

• Take out a payday loan so you can save before you receive your paycheck

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

• 3 Months

• 9 Months

• 24 Months

• 30 Months

All of the following statements about bank accounts are true EXCEPT

• If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails.

• Many banks pay interest on the money you deposit into your savings account.

• Historically, savings accounts earn higher returns than investments in the stock market.

• Money in a checking account is usually easy to access via ATM, debit card or check.

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for...

• Retirement, a house down payment, college tuition

• A new cell phone, college tuition, a house down payment

• a new cell phone, dinner with friends this weekend, a new bike

• retirement, college tuition, a vacation

Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _________________________, 30% of your monthly income towards _____________________, and 20% of your monthly income towards ____________________.

• needs, wants, savings

• savings, needs, wants

• needs, savings, wants

• wants, needs, savings

Which represents the BEST time to start saving for your retirement?

• as soon as you have your first full-time job

• right after you pay off your student loans

• once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

• at age 45, so you have exactly 20 years until retirement

Which of the following statements is TRUE?

• the majority of Americans have an adequate emergency fund

• the majority of Americans have sufficient amounts of money saved for retirement

• the majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement

• the majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement

Experts recommend that you accumulate enough to cover 3 to 6 ___________________________ of expenses in your emergency fund.

• Days

• Weeks

• Months

• Years

Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?

• online savings accounts are FDIC insured to a higher limit

• online savings accounts typically pay higher interest rates on deposits

• online savings accounts are less likely to make you the victim of identity theft

• online savings accounts are created specifically for people under age 25