Budget Challenge Review Questions

True or False: Banks are required to make electronically deposited funds available on the same day of the deposit

• True

• False

The fee the bank charges the depositor of a bad check is...

• A returned check fee

• Non-sufficient funds fee (NSF)

• Below minimum balance fee

• Service fee

What is overdraft protection (ODP)?

• A cheap and easy way to always avoid overdrawing a bank account

• A service provided by the government that insures individuals bank deposits up to $250,000

• An insurance policy sold by banks to prevent others from withdrawing your money

• A service to automatically transfer available funds from a linked account to cover purchases, prevent returned checks and declined items when you don’t have enough money in your checking account at the time of the transaction.

The fee the bank charges the issuer of a bad check is...

• A returned check fee

• Non-sufficient funds fee (NSF)

• Below minimum balance fee

• Service fee

What type of accounts can be linked to a checking account for overdraft protection?

• 401k account and IRA account

• Savings account, 401k account, & frequent shopper account

• Savings account, credit card, or another checking account

• There are no linked accounts needed for overdraft protection

1. Increasing your 401k deduction will ________ your gross pay and __________your federal taxes in the current year.

• decrease, decrease

• not change, decrease

• decrease, Increase

• increase, decrease

4. Assume you are participating in your employer's direct deposit program. On payday, the employer deposits your ________ into your bank account.

• Gross pay

• Net Pay

• 401(k)

• W-2

Suppose you filed your taxes and received a small refund from the IRS. What would have been the impact on the refund amount if you had increased the W-4 allowances for that tax year?

• The refund would be larger.

• The refund would be smaller or you may owe taxes.

• The refund would not change.

• None of the answers provided are correct.

To improve your credit score, your credit utilization rate should be below _______ .

• 20%

• 80%

• 60%

• 40%

Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, would you have more than $102, exactly $102 or less than $102?

• More than $102

• Exactly $102

• Less than $102

• Don't know