Banking Unit Review

Juan saved $1,000 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

Your friend pays you back with a check, and you lose it before cashing it. What should you do first?

• Write a new check for yourself

• There’s nothing you can do. The money is lost.

• Contact your friend to issue a stop payment

• Contact your bank to issue a stop payment

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

All of the following are true about prepaid cards EXCEPT...

• a. Prepaid cards typically include a lot of fees

• b. Prepaid cards are a useful option for someone who is unbanked to make online purchases

• c. Prepaid cards are a great way to build credit

• 1. Prepaid cards are usually accepted anywhere that debit and credit cards are accepted

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 (a)   , 30% of your monthly income toward (b)   , and 20% of your monthly income toward (c)   .

• Needs
• Wants
• Savings
• Spending

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.

• months

• weeks

• days

• years