Understanding Bank Accounts

What is the primary function of a checking account?

• To pay interest on stored money

• To provide loans to others

• To allow withdrawal of funds using checks and debit cards

• To save money for long-term goals

What typically happens to the balance of a checking account?

• It changes on a daily basis

• It remains constant

• It is only used for savings

• It increases over time

Why does a bank pay interest on a savings account?

• Because it is a requirement by law

• Because it lends the money to other customers

• Because it needs to secure the funds

• Because it uses the money to fund its operations

What is interest?

• A reward for using a debit card

• A government tax on personal income

• A charge for borrowed money, usually a percentage of the amount

• A fee for maintaining a bank account

Which account is typically used for day-to-day living expenses?

• Credit account

• Checking account

• Savings account

• Loan account

Saving money is an important goal for everyone. Having savings ensures that

• You will be a billionaire by the time you are 21

• Your piggy bank makes a nice sound when you shake it

• You have money set aside for the future.

• You can buy a bank.

Taking charge of your finances and being aware of how much money you have and how much you want to save is an important step toward ______

• Overspending

• Financial security

• Hosting a financial podcast.

• Becoming a billionaire by the time you are 21

Groceries are an example of ________________

• Essential expenses: everyone has to eat

• Non-essential expenses

• investments

• credit

What is a "balance" in banking terms?

• a list of everything you earn and what you spend

• the amount of money you earn

• the amount of money you spend

• the money available in a checking or savings account

What is a "deposit" in banking terms?

• money that is in a savings account

• money that is taken out of a bank account

• money that is put into a bank account

• money that is in a checking account