CSmith Economics Unit 3: Banking Review

What is a reason to have a savings account at a bank?

• To ensure that your money is invested

• To keep the economy strong

• To improve your chances of a better interest rate

• To keep your savings protected and insured

What account is best to gain interest on a large sum of money you do not need access to anytime soon?

• Savings

• Checking

• Certificate of Deposit

• Money Management Account

Which account should be used to make regular online payments for bills and expenses?

• Savings

• Checking

• Certificate of Deposit

• Money Management Account

What mistake did this account user make?

• Too many transactions

• Overdrafted account

• Wrong account for these actions

• Too much money deposited this month

What is one negative of putting your savings into a Certificate of Deposit?

• Too much of it is invested

• Money does not gain interest

• Money can only be used for college tuition

• Money cannot be withdrawn without large penalty

What is an issue when using an ATM outside of your bank's network to get cash?

• Too hard to find

• Too easy to get your account information stolen

• Not enough cash can be withdrawn

• Fees will be charged per withdrawal

What can be done to avoid overdraft fees when using a bank account?

• Online banking apps and alerts

• Allowing it to happen, as it cannot be prevented

• Setting up a trust with your bank

• Opening an MMA, as these do not have overdraft charges attached

How can setting short, medium, and long term financial goals help you save?

• Keeps your bills lower

• Increases the likelihood of you spending more

• Decreases the chances of you being unemployed

• Helps focus financial behaviors towards wants and needs

Which of the following is a widely popular savings strategy?

• Pay it forward

• 50/50

• Save it first

• 50/30/20

How does the "pay yourself" savings plan operate?

• 20% of income is set aside for savings and debt monthly

• 50% of income is immediately put into an MMA

• 30% of income is set aside for a Certificate of Deposit

• Savings are instantly taken out of paychecks to prevent spending