8. 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

9. Which of the following statements about banks is FALSE?

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

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

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

10. 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 a down payment on a home

11. Which of the following statements is TRUE?

The interest rate on your savings account will vary over time and be set by the bank.

The interest rate on your savings account will remain the same as long as you keep the account open.

You can choose the interest rate on your savings account, but only once per year.

The interest rate on your savings account will vary over time and be set by the government.

12. Which of the following individuals is the wealthiest?

Karina owns a $50,000 car and has $5000 remaining on her car loan.

Maria owns a $15,000 car and owes $45,000 in student loan debt.

Keith owns a $500,000 home and has a $460,000 mortgage.

Elyse owns a $25,000 car that is entirely paid off but has $10,000 in credit card debt.

13. You are at the checkout counter at the local supermarket, use your debit card to pay for your groceries, and select “credit” when the cashier asks “Debit or credit?” Where does the money for this purchase come from?

It is deducted directly from your checking account

Your credit card company covers the cost

Your credit card company provides you with a cash advance to cover the cost

It is deducted from your credit card account

14. A person-to-person payment would best be used in which of these situations?

To repay your uncle who covered the cost of your first semester textbooks

To give a donation to someone soliciting contributions outside the grocery store

To buy some school supplies and baseball equipment while shopping online

To give a tip to the waitress at a diner

15. Your friend Tammy just got a part-time job so she can afford to attend a school trip abroad later this school year. Tammy gets a paycheck on the 1st of every month, and a cash payment is due to the International Club advisor by the 3rd of every month with no exceptions. More than one late payment results in being removed from the trip. What recommendation do you have for Tammy?

Sign up for direct deposit with her employer so that the money is already in her account the morning of the 1st

Use her 15-minute break during work on the 1st of each month to run to the check cashing business; hopefully she doesn’t get delayed by long lines and return to work late, which will anger her boss

Deposit the check through her mobile app on the 1st of the month and do a cash withdrawal from the ATM each month on the 2nd; hopefully the check clears in time to avoid fees

Sign up for overdraft protection, withdraw the money from an ATM regardless of whether the funds are there in time, and just pay the $35 overdraft fee

16. Jocelyn gets a text alert from the bank that her account has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

Contact her bank immediately as it appears that her account may have been hacked

Wait until her monthly statement arrives so she can check to see if those withdrawals are still there

Wait a week, as it is fairly common for the bank to catch mistakes like this

Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry

17. Each of the following is a way to access money in your checking account EXCEPT...

Swipe a prepaid card to pay for your fast food purchase

Take out cash using your debit card at an ATM machine

Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal

Write a check to pay the rent on your apartment

18. Devon lives in a large apartment complex, and his rent is due by the first of each month to “Richardson Rental Properties and Housing Options, LLC” which has its office 45-minutes away in downtown Houston. Which payment option makes the most sense if Devon is trying to be responsible and efficient with his time?

Set up a text alert reminder to write and mail a check by the 28th of the previous month

Ask his employer to set up direct deposit

19. Which of the following transactions will REDUCE your checking account balance IMMEDIATELY?

Using your debit card to pay for groceries at the supermarket

Writing your monthly rent check which you will mail tomorrow

Using your credit card to pay for your school books

Depositing a check at a local bank branch

20. Which of these is the most convenient feature of using online and mobile banking?

Using online banking, you can request transfers, bill pay, automatic savings, and other features without visiting the bank branch

Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees

By signing up for online banking, you will activate the FDIC insurance on your account

You can shop online only if you've set up online banking

21. Which action below is considered a best-practice for check writing?

Recording all of your transactions in a check register

Using a pencil so that you can quickly erase any errors without having to throw any checks away

Leaving the “to” field blank until the very last minute, so that no one else can steal the check

Writing quite sloppily in each field so that no one else can forge your handwriting

22. When signing up for a new checking account you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account. You go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

You will likely be charged an overdraft fee for EACH transaction and also will need to repay the bank for the amount overdrawn ($29)

Because you requested overdraft protection, the bank will not allow you to overdraw your account, so your debit card will be denied in these 3 instances

The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

23. When signing up for a new checking account you answer "No" to receive overdraft protection. On this day, you have $10 in your account. You go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

Because you turned down overdraft protection, the bank will not allow you to overdraw your account so your card will be denied in these 3 instances

You will likely be charged an overdraft fee for EACH transaction and need to repay the bank the funds overdrawn ($29)

The bank will provide you with five days to add funds to your account to cover the overdraft but will not charge you any fees.

24. Using a digital wallet payment such as Apple Pay or Samsung Pay is considered safe because...

You do not need to hand your card to the cashier, so your personal information and account number remain private

Only major stores that can afford anti-hacking software accept these payments types

Not very many people have smartphones capable of using that payment type

They include overdraft protection for free when you use this payment type

25. You find three receipts from your activities today: (1) ATM withdrawal of $60 plus $3 out-of-network ATM fee, (2) Debit card used for grocery bill of $34 plus cash back of $20, and (3) ATM deposit of $90 from birthday checks. What is your current balance if you started the day with $300 in your account?

$300, because banks don't process any same-day transactions

26. Which of the following transactions may NOT be reflected on your account balance if you go online to check your balances?

Check that you mailed to your cousin for his birthday today

ATM cash withdrawal from yesterday

Automatic payment for your car loan paid two days ago

Debit card transaction from purchasing snacks at a local convenience store today

27. You visit a local bank that is FDIC-insured to open a checking account. Assume that you can only ask the bank representative one question before you open your account. What would it be?

What is your schedule of fees for this account?

What is the interest rate on the account?

What happens if my debit card is stolen?

Do I get cashback on all of my debit card purchases?

29. How does a low-balance mobile alert on your checking account work?

It will alert you when your balance falls below a certain amount, and you will know to stop spending until you can add additional funds

It will make it impossible to overdraw your account

When triggered it will automatically transfer money from your savings account so you don’t overdraw

It will freeze your account so that no one can make any withdrawals for 24-hours

30. Why is it so important to have a checking account?

A checking account facilitates the rest of financial life by making your money available when and where you need it while also keeping it safe

Without a checking account, you are unable to cash your paycheck or pay your taxes

Opening a checking account is the only way to gain access to a savings account, which is essential if you want to make money by investing

Opening a checking account is the first step in building your credit history, which you will need in order to receive loans, scholarships, and grants for college

31. Which statement about check cashing businesses is TRUE?

They allow customers to get access to their cash quickly with a fee

They are FDIC insured for deposits up to $250,000

They only charge fees if you are not a member

They save customers time by only existing online and through mobile devices

32. While opening your checking account, the bank representative seems very interested in getting you to sign up for overdraft protection. What might explain his motivation?

Banks generate income by charging fees such as overdraft

He wants to minimize the fees you might pay to the bank

He is required by law to sign you up for overdraft protection

He wants to protect your credit score

33. Leia has a checking account at a credit union, but she loads cash onto and uses prepaid cards sometimes, too. What might be her reason?

She feels the prepaid card prevents her from overspending because she loads on a fixed dollar amount and there is no option to overdraw

She can use a prepaid card to shop online but cannot do the same with a debit card

She earns points, miles, and other perks by using a prepaid card that she doesn’t with her debit card

Credit unions charge fees every time she uses her debit card, whereas prepaid cards typically have no fees

34. Cam is moving from her childhood home in Scranton, PA to an apartment with her best friend in Los Angeles. She plans to stay 3-6 months to test whether she likes living on the West Coast, and then she may move again. Which of these is the BEST option for Cam when opening a checking account?

Open an account at a large national bank with a lot of branch locations

Sign up for whatever bank is offering the best promotion, such as a $50 bonus for new account holders

Join a local credit union in CA with no monthly fees and low overdraft fees

Keep the joint savings account she shares with her dad and just use that instead of opening a separate checking account

35. Which of the following is a good habit to protect your checking account information?

Create complex passwords that are a long combination of letters, numbers, and symbols

Carry the username and password for your online banking account in your purse or wallet in case you need it on-the-go

Use your account number as your online banking password so it is easy for you to remember but difficult for others to guess

Share login information with a few friends and family members so that trusted individuals can access your money in an emergency

Checking & Saving REVIEW

Authored by Ali Shelley

Life Skills

9th - 12th Grade

Used 3+ times

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35 questions

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MULTIPLE CHOICE QUESTION

30 sec • 2 pts

1. Which of these statements about savings 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

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

Without a vehicle to save (like a savings account), it's much easier to spend and harder to keep track of finances

Billions of dollars is spent on marketing to persuade consumers to spend money instead of saving it

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

2. 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

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

3. Use the chart above. All three have fees competitive with other banks. Which bank is the best option?

Bank A

Bank B

Bank C

All 3 banks are equally good options

MULTIPLE CHOICE QUESTION

30 sec • 2 pts

4. 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)

MULTIPLE CHOICE QUESTION

30 sec • 4 pts

5. You open a new bank account at Eastside Savings. You see FDIC stickers around the bank, and the teller specifically mentions that Eastside Savings is "FDIC insured". A few months later, you hear on the radio that Eastside Savings is struggling to stay in business. Your savings balance is $500. What would happen to that money if Eastside Savings failed?

You would receive all the money you have deposited at Eastside Savings since FDIC insurance covers accounts up to $250,000.

You could lose $250 since FDIC insurance only covers 50% of the money you have deposited.

You would lose all of your money.

You would receive $250,000 since FDIC insurance provides each account at the bank with $250,000 regardless of how much they have deposited.

MULTIPLE CHOICE QUESTION

30 sec • 4 pts

6. 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

MULTIPLE CHOICE QUESTION

30 sec • 4 pts

7. 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

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