Banking

What is the difference between a checking account and a savings account?

• A savings account earns interest and a checking account does not

• There is no difference between the two

• A checking account earns interest while a savings account does not

• A chucking account is used for emergencies only and a savings account is for every day spending

What is the purpose of a checking account?

• Emergencies only

• Long-term savings and expensive purchases

• Every day spending

• All of the above

What is the purpose of an emergency fund?

• An account you create only after an emergency happens

• Long term savings for big purchases

• Everyday spending

• A separate account for emergencies only so that your checking and savings stay in tact when an emergency happens

How much should you save in an emergency fund?

• 1 year of expenses

• 3-6 months of expenses

• 6-8 months of expenses

• 2-3 months of expenses

How much is your money insured up to by the FDIC or NCUA?

• $100,000

• $200,000

• $250,000

• $500,000

Which of the following best represents a short term goal?

• a new house

• a new cell phone

• a car

• retirement

1. You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

• your credit card company covers the cost

• 1. It is deducted directly from your checking account

• 1. Your credit card company provides you with a cash advance to cover the cost

• 1. It is deducted directly from your savings account

1. Your bank does not have a grace period for overdraft fees. You have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

• 1. Your account will be closed

• Your bank will give you 24 hours to add more funds to the account

• 1. You will likely be charged an overdraft fee for one or more of the transactions and

• Your bank will provide the funds for your account, and you will have to pay them back at a later date