Banking Basics

Juan saved $1000 from his summer hob 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 and wants to earn the highest interest rate?

• Regular Savings Account

• Checking Account

• Money Market account

• Certificate of deposit

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.

• Checking accounts earn higher returns than savings accounts.

• 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.

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

• Months

• Weeks

• Days

• Years

Three of the following statements best describes a checking account. Which one best describes a savings account?

• 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 pays you interest on money you have put away for later to help your money grow.

• This account allows an unlimited number of transactions per month.

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

• Your credit card company covers the cost

• Your credit card company gives you a cash advance

• It is deducted directly from your checking account

• It is deducted directly from your savings account.

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

• Wait for her monthly statement

• Check her wallet for her debit card. If it is there, she shouldn't worry.

• Wait a week to see if the bank catches the mistakes

• Contact her bank immediately.

Which of the following transactions will reduce your checking account balance immediately?

• Writing a check that you will put in the mail tomorrow

• Using your credit card for a purchase

• Using your debit card at the supermarket

• Depositing a check at the local bank

CDIC is the Canadian equivalent to the FDIC. This is . . .

• Optional coverage consumers can purchase so that their bank deposits remain safe

• Required if you want to do online banking

• Insurance bank branches can buy to protect their business against fraud and scams.

• Protection for bank customer's deposits up to $250 000 guaranteeing that their money is available if the bank goes out of business.

Direct deposit typically refers to your _________ sending your __________ electronically to your bank account.

• employer, paycheck

• bank, paycheck

• bank, loan

• friend, allowancce

What type of account would you use for longer term deposits?

• Chequing

• Savings