Banking - Unit Test

Which of the following is an effective strategy for personal saving?

• Wait until the end of the month and save whatever is left in your checking account
• Save a certain percentage of each paycheck and deposit it directly into a savings account
• Cover all of your wants and needs and save whatever is left over
• Take out a payday loan so you can save before you receive your paycheck

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…

• Retirement, a house down payment, college tuition
• A new cell phone, college tuition, a house down payment
• A new cell phone, dinner with friends this weekend, a new bike
• Retirement, college tuition, a vacation

Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.

• Needs, wants, savings
• Savings, needs, wants
• Needs, savings, wants
• Wants, needs, savings

Which represents the BEST time to start saving for your retirement?

• As soon as you have your first full-time job
• Right after you pay off your student loans
• Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
• At age 45, so you have exactly 20 years until retirement

Which of the following statements is TRUE?

• The majority of Americans have an adequate emergency fund
• The majority of Americans have sufficient amounts of money saved for retirement
• The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement
• The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement

Three of these statements best describe a checking account. Which statement best describes a savings account?

• This account offers a convenient way to pay bills and access cash from an ATM
• This account pays you interest on money you have put away for later to help your money grow
• This account is automatically debited when you use a debit card
• This account typically allows an unlimited number of transactions per month

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
• It is deducted directly from your checking account
• Your credit card company provides you with a cash advance to cover the cost
• It is deducted directly from your savings account

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

• Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
• Wait a week as it is fairly common for the bank to catch mistakes like this
• Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
• Contact her bank immediately as it appears that her account may have been hacked

Which of the following transactions will REDUCE your checking account balance immediately?

• Writing your monthly rent check which you will mail tomorrow
• Using your debit card to pay for groceries at the supermarket
• Using your credit card to pay for your school books
• Depositing a check at a local bank branch

FDIC Insurance is...

• Optional coverage consumers can purchase so that their bank deposits remain safe
• Insurance bank branches can buy to protect their business against fraud and scams
• Required if you want to do online or mobile banking
• Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business