Savings Accounts Quiz

What is the main purpose of a savings account?

• To earn interest

• To pay bills

• To withdraw cash frequently

• To invest in stocks

Which of the following is a key difference between a checking and a savings account?

• Savings accounts typically offer interest

• Checking accounts have higher interest rates

• Savings accounts are used for daily transactions

• Checking accounts are for long-term savings.

Why is it important to have both a checking and a savings account?

• To maximize interest earnings

• To separate daily expenses from savings

• To avoid bank fees

• To invest in the stock market.

Which of the following is a benefit of compound interest?

• It reduces the principal amount

• It increases savings over time

• It offers a fixed return

• It decreases interest rates.

Fill in the blank: A savings account is ideal for ________.

• Daily transactions

• Long-term savings

• Paying bills

• Investing in stocks

How does this low interest rate impact the power of compounding?

• It decreases the overall returns on savings.

• It has no effect on compounding.

• It increases the overall returns on savings.

• It makes compounding irrelevant.

What saving account features does the article recommend inquiring about?

Which of the following is a benefit of starting to save early?

• Higher compound interest

• Lower interest rates

• More account fees

• Less savings