Banking Unit Study Guide — Personal Finance Unit 2 (Topics)

Front

What is the difference between a checking account, a savings account, a Certificate of Deposit (CD), and a Money Market account?

Back

A checking account is for daily transactions, a savings account is for saving money with limited withdrawals, a CD locks money for a set period with higher interest, and a Money Market account offers higher interest with limited transactions.

Front

Which of the following account types typically offers the highest interest rate? Checking Account, Savings Account, Certificate of Deposit (CD), Money Market Account

Back

Certificate of Deposit (CD)

Front

What does 'pay yourself first' mean in the context of savings strategies?

Back

It means setting aside money for savings before spending on other expenses.

Front

What is the recommended emergency fund target in terms of months of expenses?

Back

3–6 months of expenses

Front

The 50–30–20 rule in budgeting stands for:

Back

50% Needs, 30% Wants, 20% Savings/Debt

Front

What are some causes and fixes for living paycheck to paycheck?

Back

Causes include overspending, lack of budgeting, and insufficient income. Fixes include budgeting, reducing expenses, and increasing income.

Front

What is the difference between simple and compound interest?

Back

Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus accumulated interest.

Front

Why does starting retirement savings early matter?

Back

Because compound interest allows savings to grow more over time, so starting early increases total savings.

Front

FDIC/NCUA insurance covers which of the following? Stocks, Bank deposits, Mutual funds, Real estate

Back

Bank deposits

Front

Which of the following is NOT a payment method listed in the study guide?
Debit card, Credit card, Cryptocurrency, Checks

Back

Cryptocurrency