Personal Financial Literacy Module 2 DBA

What type of account gives you access to debit cards, and ATM withdrawals and writing checks?

• Savings

• Checking

• 401(k)

• Social Security

What does is an IRA?

• An account made for investing (Investment Real Estate Account)

• An account made for college (Individualized Residual Account)

• An account made for retirement (Individual Retirement Account)

How do employers offer incentives to save?

• They send monthly reminders by email

• They are required to add money into your 401(k) each month

• If you save, they might offer matching up to a certain percentage of your income

• They are not allowed to offer incentives to save money

How do governments protect consumers from fraud?

• Several agencies are in place to protect our funds including the Fed the OCC, FDIC, NCUA and SEC

• The FDIC protects your stock market investments

• The NCUA keeps your commercial bank funds safe

• The Fed, OCC, FDIC, NCUA, and SEC all help protect Social Security benefits

What is fraud?

• Someone who tries to break in and steal cash from your home

• A business overpricing their items

• Deceptive and often illegal sales practices

Which agency protects deposits of up to $250,000 per financial institution?

• The Securities and Exchange Commision (SEC)

• Federal Reserve System

• Federal Deposit Insurance Corporation (FDIC)

• Bureau of Consumer Protection (OCC)

What is a nominal interest rate?

• The rate quoted in loan and deposit agreements

• The rate an investment is expected to earn, after inflation

• This rate is always compounded

• Cumulative inflation makes this rate possible

You can calculate the after tax real rate of return by

• Subtracting interest earned

• Adding interest earned

• Subtracting taxes and inflation from the interest earned

• Adding taxes and inflation from the interest earned

What is compounded interest?

• The interest you earn on interest

• It is simple interest divided in half

• The interest you earn on your investments