Savings Accounts Retake Activity

Front

How many withdrawals can you make a month with a savings account?

Back

6

Answer explanation

After 6 withdrawals a month, most savings accounts (traditional, high yield, some money markets) will charge a small fee for every additional withdrawal.

Front

You earn _______________ by saving money in a savings account.

Back

interest

Front

Interest earned on both the principal and any interest earned on the principal.

Back

Compound interest

Front

Interest calculated on the amount of money deposited ONLY.

Back

Simple

Front

What government agency insures your money in a savings account?

Back

FDIC

Answer explanation

The NCUA is not a government agency, it is an independent association that only insures deposits of affiliated credit unions (not big banks)

Front

What is a good strategy to help you save? Options: Spend money on all expenses first; put the rest into saving, Tap into your savings on a regular basis, Pay yourself first - set aside money for savings each month, Keep your spending and saving money together in 1 account

Back

Pay yourself first - set aside money for savings each month

Answer explanation

1. 1. If you save after all expenses, there may not be anything left in your checking account to save.

2. 2. If you keep your checking account and savings dollars together, there may be temptation to spend or confusion about what is available to spend and what is supposed to be saved.

3. 3. If you are regularly tapping into your savings account, it is a spending account, not savings.

Front

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

Back

Save a certain percentage of each paycheck and deposit it directly into a savings account

Front

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from shortest term to longest term? A new cell phone, college tuition, a house down payment

Back

A new cell phone, college tuition, a house down payment

Answer explanation

Short Term: <6months

Medium Term: 6 months - 3 years

Long Term: >3years

Front

Which statement best describes a savings account? Options: 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 debited when you use a debit card, This account typically allows an unlimited number of transactions per month

Back

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

Front

Savings account with higher interest rate (variable rate)

Back

Money market