banking study guide

Front

What is a checking account?

Back

A checking account is a type of bank account that allows for numerous withdrawals and deposits, and is typically used for daily transactions.

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What is a savings account?

Back

A savings account is a bank account that pays interest on the money deposited, encouraging saving for future needs.

Front

What is the importance of saving a percentage of your paycheck?

Back

Saving a percentage of your paycheck helps build financial security and ensures that you have funds available for emergencies or future goals.

Front

How long will it take Joelle to build her emergency fund if she saves 10% of her $4,000 monthly gross pay?

Back

It will take Joelle 30 months to build her emergency fund of $12,000.

Front

What happens to purchasing power if inflation is higher than your savings account interest rate?

Back

If inflation is higher than your savings account interest rate, you will be losing purchasing power.

Front

When is the best time to start saving for retirement?

Back

The best time to start saving for retirement is as soon as you have your first full-time job.

Front

What is an emergency fund?

Back

An emergency fund is a savings account set aside for unexpected expenses or financial emergencies.

Front

What is the purpose of interest in a savings account?

Back

The purpose of interest in a savings account is to reward you for keeping your money in the bank, allowing it to grow over time.

Front

What is the difference between wants and needs in personal finance?

Back

Wants are non-essential items or services that enhance quality of life, while needs are essential for basic survival and well-being.

Front

What is the impact of taking out a payday loan on personal savings?

Back

Taking out a payday loan can negatively impact personal savings by increasing debt and reducing available funds for saving.