Banking Unit 2 (English)

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

• Money Market Account

• Checking Account

• Certificate of Deposit (CD)

• Regular Savings Account

Which of the following is an effective strategy for personal saving?

• Take out a payday loan so you can save before you receive your paycheck.

• Cover all your wants and needs and save what is left over

• Wait until the end of the month and save what is left

• Save a certain percentage of each paycheck and deposit it directly into a savings account.

All of the following statements about bank accounts are true EXCEPT…

• If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails.

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

• Many banks pay interest on the money you deposit into your savings account.

• Money in a checking account 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 represents possible goals from short-term to long-term? Save for...

• Retirement, a house down payment, college tuition

• A new cell phone, dinner with friends, a new bike.

• A new cell phone, college tuition, a house down payment

• Retirement, college tuition, a vacation.

Fill in the blanks with the correct responses.  If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________. 

• Needs, wants, savings

• Savings, needs, wants

• Needs, savings, wants

• wants, needs, savings

Which represents the BEST time to start saving for your retirement? 

• As soon as you have your first full-time job

• Right after you pay off your student loans

• Once you are debt-free, including paying off all credit cards, auto loans, and mortgage.

• At age 45, so you have exactly 20 years to retirement.

Which of the following statement is TRUE?

• The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement

• The majority of Americans have an adequate emergency fund

• The majority of Americans have sufficient amounts of money saved for retirement

• The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement

Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund. 

• Months

• Days

• Weeks

• Years

Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank? 

•  

  Online savings accounts typically pay higher interest rates on deposits

•  

  Online savings accounts are FDIC insured to a higher limit

•  

  Online savings accounts are less likely to make you the victim of identity theft

•  

  Online savings accounts are created specifically for people under age 25

Three of these statements best describe a checking account. Which statement best describes a savings account? 

•  

  This account pays you interest on money you have put away for later to help your money grow

•  

  This account offers a convenient way to pay bills and access cash from an ATM

•  

  This account is automatically debited when you use a debit card

•  

  This account typically allows an unlimited number of transactions per month