Unit 1A Review

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

• Making it easier to pay bills

• The ability to make purchases with a debit card

• Access to cash at an ATM

• Earn interest on your deposits

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

• Higher interest rates and lower fees

• Lower interest rates and higher fees

• Higher interest rates and higher fees

• Lower interest rates and lower fees

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

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

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

• 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

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

• Ability to withdraw money from an ATM

• FDIC insured up to $250,000

• Your money earns interest

• Ease of making payments using a debit card

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?

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

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

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

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

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

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

• 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

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

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

Which of the following statements is TRUE about overdraft fees?

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

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

• You are charged when more money is withdrawn from your account than it has available

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

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

• Meeting a monthly minimum balance requirement

• Only banking online instead of using physical bank locations

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

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

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

• Avoiding out of network ATMs

• Finding a bank that reimburses you for ATM fees

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

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

Which of the following is a disadvantage of using a payroll card?

• You cannot withdraw your money for cash

• Many payroll cards charge fees

• You cannot use your payroll card as a debit card

• It is challenging to use a payroll card for purchases