Banking

1. All of the following are reasons to open a checking account EXCEPT… 

• 1. Making it easier to pay bills

• 1. The ability to make purchases with a debit card

• 1. Access to cash at an ATM

• 1. Earn interest on your deposits

2. Which of the following is usually a benefit of being a member at a credit union?

• 1. Higher interest rates and lower fees

• 1. Lower interest rates and higher fees

• 1. Higher interest rates and higher fees

• 1. Lower interest rates and lower fees

3. Daisy reads her bank statement and finds an error.  She should…

• 1. Do nothing. The bank will correct the error at the end of the month.

• 1. Call the FDIC. She is insured up to $250,000.

• 1. Call the bank. The bank will investigate the transaction to see if it was an error.

• Assume that it’s a transaction that she made and forgot about.
  

1. Which of the following is typically a feature of a savings account but not a checking account?

• 1. Ability to withdraw money from an ATM

• 1. FDIC insured up to $250,000

• 1. Your money earns interest

• 1. Ease of making payments using a debit card

2. Tyreke has $5,000 to put into an account that earns compound interest.  Which of the following is the BEST advice you can offer so that he can maximize interest?

• 1. It’s ok to open an account with a low interest rates as long as you deposit your money early

• 1. Deposit your money as early as possible in an account with the highest interest rate possible

• 1. Wait for interest rates to rise above 5%, otherwise compounding doesn’t have any effect

• 1. Compound interest will not have any effect at such a low dollar amount.  Find different opportunities to earn interest on your savings.

  
  

3. Which of the following is TRUE when comparing savings accounts and certificates of deposit?

• 1. Savings accounts are FDIC insured while certificates of deposit are not

• 1. Savings accounts allow you to access your money at all times while certificates of deposit require your money to be left alone for a set period of time

• 1. Savings accounts typically have a higher interest rate than certificates of deposit

• 1. Both savings accounts and certificates of deposit allow you to deposit money at any time

1. Which of the following statements is TRUE about overdraft fees?

• 1. You are legally required to have overdraft protection for your account

• 1. They are charged if you fail to meet the minimum balance requirement

• 1. You are charged when more money is withdrawn from your account than it has available 

• 1. They are a one-time payment made by the bank to the account holder

  
  

How is compound interest different than simple interest?

• Compound interest is calculated on the initial amount only

• 
  Simple interest is calculated more frequently

• 
  Compound interest is calculated more frequently

• Simple interest is calculated on the initial amount only

2. All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT… 

• 1. Meeting a monthly minimum balance requirement

• 1. Only banking online instead of using physical bank locations

• 1. Having both a checking and savings account with the same bank

• 1. Finding a bank that offers accounts with no monthly maintenance fee

3. All of the following are ways to avoid ATM fees EXCEPT… 

• 1. Avoiding out of network ATMs

• 1. Finding a bank that reimburses you for ATM fees

• 1. Using your debit card instead of withdrawing cash to make a purchase

• 1. Withdrawing money from your savings account instead of your checking account