Savings Review

Juan saved $1,000 from his summer job cleaning pools. Which of these savings option would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?

• Regular savings account

• Money Market account

• Checking account

• Certificate of Deposit

Jeremy is a 17-year-old junior in high school and just started his first job. He wants to open a savings account. Which of these will he need to bring to the local bank branch in order to start an account?

• A letter from his school

• A letter from his parents

• An adult cosigner because he is under 18

• An adult cosigner because he is still a student

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time?

• Daily

• Monthly

• Quarterly (three months)

• Annually (a year)

Stanley deposits $1,000 into a savings account that pays 1% interest per year. At the end of the first year, he's earned $10 in interest and there is $1,010 in the account. If the account has simple interest, the 1% interest for year two would be based off ____________. If the account has compounding interest, the 1% interest for year two would be based off ________________.(NOTE: The first choice goes in the first blank, the second choice goes in the second blank).

• The original deposit ($1,000); The year one account balance ($1,010)

• The original deposit ($1,000); The year one interest ($10)

• The year one account balance ($1,010); The year one interest ($10)

• The year one account balance ($1,010); The original deposit ($1,000)

Which list includes the most important factors to consider when opening a savings account?

• The fees, the interest rates, and the minimum deposit to open the account

• The fees, the interest rates, and the bank’s brand recognition

• The fees, which bank your friend uses, and the minimum deposit to open the account

• The fees, which bank your friend uses, and the bank’s brand recognition

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 in 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

What would be a good time to spend money from your Emergency Fund?

• You lose your job but still have bills to pay

• Your friend tells you that you should buy as much Bitcoin as possible

• Your favorite artist releases a new album and you just have to buy it

• Your friends are going on an expensive trip an you would like to go with them

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly income is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

• 3 months

• 9 months

• 24 months

• 30 months

Which of the following statements about banks is FALSE?

• If it is FDIC-insured, your money is safe even if the bank fails

• Many banks pay interest for the money you deposit with them

• Historically, savings accounts earn higher returns than investments in the stock market

• Money in a bank is usually easy to access via ATM, debit card or check

You are developing a savings plan and using short-, medium- and long-term goals to motivate you. Which of the following might you pick as the most long-term goal?

• Saving for retirement

• Saving for a down payment on a home

• Saving to buy a car

• Saving to go on vacation