Savings Options - Howard

Define liquidity.

• Businesses that provide financial services

• Insured if the account is within coverage limits

• How quickly and easily an asset can be converted into cash

Which account is the least liquid?

• Checking Account

• Savings Account

• Money Market Deposit Account

• Certificate of Deposit

Which is the most liquid savings tool?

• Checking Account

• Savings Account

• Money Market deposit account

• Certificate of deposit

In relation to the other options, how liquid is a savings account?

• More liquid than cash

• Less liquid than mutual funds

• More liquid than a Certificate of Deposit

• More liquid than a checking account

Which option lists the savings tools in order from the MOST liquid to the LEAST liquid?

• Money market, savings account, checking account, CD

• Checking, savings, money market, CD

• CD, money market, savings, checking

• Checking, CD, money market, savings

Savings accounts are considered high risk!

• True

• False

Which of the following is a feature of a certificate of deposit (CD)?

• Funds deposited in a CD are held for a certain length of time

• Funds deposited in a CD have tiered interest rates

• Funds deposited in a CD are very liquid

• Funds deposited in a CD can be accessed via check or debit card

Which of the following is a feature of a money market deposit account?

• No minimum balance requirements

• Unlimited transactions every month

• Tiered interest rates

• The money must remain in the account for a specific period of time

Which one of these account types requires you keep your money deposited for a fixed amount of time?

• Money market account

• Savings account

• Certificate of deposit

• Checking account

Because they are FDIC and NCUA insured, CDs have _______ risk on your first $250,000.

• High

• No

• Minimal

• Opportune