Banking and Financial Literacy Quiz

What is the 50/30/20 rule in personal finance?

• 50% towards savings, 30% towards necessities, 20% towards flexible spending

• 50% towards necessities, 30% towards flexible spending, 20% towards savings and debt repayment

• 50% towards necessities, 20% towards savings and debt repayment, 30% towards flexible spending

• 50% towards flexible spending, 30% towards savings, 20% towards necessities

What does ATM stand for in banking?

• Account Transfer Mechanism

• Advanced Transaction Management

• Automated Teller Money

• Automatic Teller Machine

What is a bank statement?

• A document showing the fees charged by the bank

• A document showing the balance in your account

• A monthly document showing all transactions related to your account

• A document showing the interest earned on your savings

What is a certificate of deposit (CD)?

• A bank product that earns interest on a lump-sum deposit for a predetermined period of time

• A document certifying your deposit in the bank

• A certificate for a loan from the bank

• A document showing your credit history

What is a debit card?

• A card that allows you to make purchases without cash by borrowing money

• A card that is directly connected to your savings account

• A card that allows you to make purchases using your credit limit

• A card that allows you to withdraw money from your credit card

What is compound interest?

• Reinvesting earned interest back into the principal to allow money to grow exponentially over time

• A fee paid to you for keeping your money in an account

• A fee charged to you for a loan or credit card

• Interest paid on the principal alone

What is a money market savings account?

• A type of savings account with no minimum balance requirement

• A type of savings account with no withdrawal limits

• A type of savings account with high interest rates for long-term deposits

• A type of savings account that may allow debit card and check writing privileges

What is the Rule of 72 used for in finance?

• To calculate the monthly payments on a loan

• To calculate the interest earned on a savings account

• To calculate the number of years it will take for your money to double

• To calculate the number of years it will take for your money to triple

What is a wire transfer in banking?

• A method of transferring funds using debit cards

• A method of transferring funds using checks

• A method of transferring funds using cash

• An electronic communication that moves funds from an account in one bank to an account in a different bank instantly

What is the purpose of FDIC insurance?

• To protect the deposits of customers against loss up to $100,000 per account

• To protect the deposits of customers against loss up to $250,000 per account

• To provide insurance for investment accounts

• To provide insurance for credit card transactions