Understanding Checking and Savings Accounts

What should you not do with a check from your savings account?

• Use it to pay rent directly

• Deposit it into your checking account

• None of the above

• Write a memo asking to withdraw from savings

What is a primary feature of a checking account?

• Ease of access for daily transactions

• Limited access to funds

• Investment tool

• High interest rates

How can checking accounts be described in terms of transactions?

• Ineffective for transactions

• Highly effective for transactions

• Not suitable for daily use

• Only for investment purposes

What is not offered with a savings account?

• Both A and B

• Interest accumulation

• A debit card

• A checkbook

Why do savings accounts typically earn interest over time?

• Because they are used daily

• They are difficult to access

• Funds are left untouched, allowing for wealth building

• They have high transaction fees

What is the purpose of FDIC insurance?

• To guarantee your savings earn interest

• To insure against high transaction fees

• To prevent unauthorized access to your account

• To protect your money in case the bank fails

What is a major operational difference between checking and savings accounts from a bank's perspective?

• Checking accounts are mainly for loans

• Savings accounts fund the bank's loans

• Checking accounts earn more interest

• Savings accounts have higher fees

Why might checking accounts have fees that savings accounts do not?

• Savings accounts actually have more fees

• Because they earn more interest

• Due to the potential for quick and unexpected withdrawals

• Because they are used less frequently

What should you do if you need to pay your rent today?

• Withdraw cash from your savings account

• Transfer money to your checking account

• Write a check from your savings account

• None of the above

Why should you not attempt to write a check from your savings account for immediate expenses?

• Savings accounts do not provide checkbooks

• It's an effective way to manage daily expenses

• None of the above

• It's a convenient method for immediate payments