Savings Tools Quiz

What is liquidity in terms of savings tools?

• The fees associated with maintaining an account

• How quickly you can turn your money into cash

• The interest rate offered by the savings tool

• The minimum balance required to open an account

Which type of account typically allows for numerous withdrawals and unlimited deposits?

• Savings account

• Money market account

• Certificate of deposit

• Checking account

What must be met for high yield checking accounts to offer higher interest rates than savings accounts?

• No requirements, they always offer higher rates

• A set number of transactions per month

• Certain requirements such as minimum balance and direct deposit or bill pay

• An annual fee

How are savings accounts typically accessed?

• In-person at a bank branch only

• Online and debit card at ATM

• Check and debit card

• Direct deposit or bill pay

What is a characteristic of savings accounts in terms of transactions?

• Unlimited withdrawals and deposits

• Withdrawals limited to six per month

• No withdrawals allowed

• Only direct deposits are allowed

What is one of the benefits of a Certificate of Deposit (CD) compared to standard savings accounts?

• Lower interest rates

• No fixed date of withdrawal

• Higher interest rates

• Unlimited checking account services

How often can you access a checking account that offers limited checking account services?

• Unlimited times per month

• 1 to 3 times per month

• 5 to 10 times per month

• Once a year

What is the consequence of withdrawing money from a CD before the maturity date?

• Bonus interest

• No consequences

• Penalty

• Increased interest rate

What happens when the inflation rate is higher than the interest rate on a savings account?

• You earn more money

• The value of savings remains the same

• The value of savings increases

• The value of savings erodes

What is the recommended minimum number of bank accounts one should start with?

• One checking and two savings accounts

• Two checking and one savings account

• One checking and one savings account

• Two checking and two savings accounts