Banking Exam: Checking, Savings, & Credit

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 statement best describes a savings account?

• This account offers a convenient way to pay bills and access cash from an ATM

• This account pays you interest on money you have put away for later to help your money grow

• This account is automatically charged when you use a savings card.

• This account typically allows an unlimited number of transactions per month.

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

• Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods

• Aunt Tina and her family have no savings and spend all of their money before they receive their next paycheck

• Aunt Tina and her family save a portion of each paycheck for future expenses

• Aunt Tina and her family receive their paychecks in cash rather than through direct deposit

Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses. What is the most likely financial situation for Aunt Tina's family?

• Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses

• Aunt Tina and her family have high paying jobs and don’t worry much about money

• Aunt Tina only receives paper paychecks instead of direct deposit

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

• Your credit card company covers the cost

• It is deducted directly from your checking account

• Your credit card company provides you with a cash advance to cover the cost

• It is deducted directly from your savings account

FDIC Insurance is...

• Optional coverage consumers can purchase so that their bank deposits remain safe

• Insurance bank branches can buy to protect their business against fraud and scams

• Required if you want to do online or mobile banking

• Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business

Which of the following statements comparing credit and debit cards is TRUE?

• Far more businesses accept credit cards than debit cards

• Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard

• Credit card companies provide you with a monthly statement, while debit cards do not

• With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later

Which of the following is most likely to represent a fixed rate, secured debt?

• A student loan

• A credit card

• A prepaid debit card

• An auto loan

Reading through a credit card's Schumer Box, you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is true?

• When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed

• Your APR will be within that range, depending on the strength of your credit history

• In this case, you want the highest APR in the range because you’ll earn more

• The APR on credit cards is usually fixed, so it won't be adjusted as long as you are a cardholder

What is an advantage of using a credit card?

• It will not affect your credit score or credit history

• Since it is tied directly to your checking account, it prevents you from spending money you do not have