Unit 3 - Savings Accounts Review

Savings account that earns a little bit of interest but has the ability for you to go to a physical bank.

• Traditional Savings

• Certificate of Deposit

• Online Savings

• Money Market Account

Savings certificate with a fixed interest rate and maturity date.

• Traditional Savings

• Certificate of Deposit

• Online Savings

• Money Market Account

Savings that offers higher interest rates but managed entirely online.

• Traditional Savings

• Certificate of Deposit

• Online Savings

• Money Market Account

Account similar to savings but typically pays higher interest and requires a higher minimum balance.

• Traditional Savings

• Certificate of Deposit

• Online Savings

• Money Market Account

Interest earned on the principal

• FDIC

• Emergency Fund

• Simple Interest

• Compound Interest

Which of these statements about saving is INCORRECT?

• People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place

• Without a separate savings account to pay yourself first, it's more likely that you'll spend all of your income each month

• Billions of dollars are spent on marketing to persuade consumers to spend money instead of saving

• It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?

• Daily

• Weekly

• Monthly

• Annually

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

Which of the following statements about banks is FALSE?

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

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

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

Which of these account types allow you to write checks from the account?

• Checking accounts and money market accounts

• Checking accounts and online savings accounts

• Checking Accounts Only

• Savings Accounts Online