NGPF Banking Review

What is a traditional savings account?

• A deposit account that earns interest and allows for regular deposits and withdrawals

• A savings certificate issued by a bank or credit union

• A type of checking/savings account that requires a minimum balance and offers limited check-writing privileges

What is the main advantage of a traditional savings account?

• Accessibility to money

• Relatively high interest rate

• FDIC insured

What is a certificate of deposit (CD)?

• A deposit account that earns interest and allows for regular deposits and withdrawals

• A timed deposit. You agree with the bank to keep the money in their account for a set period of time. The bank pays you interest in return.

• A type of checking/savings account that requires a minimum balance and offers limited check-writing privileges

What is the main advantage of a certificate of deposit (CD)?

• Easily accessible

• Relatively high interest rate

• No penalty for early withdrawal

What is the main disadvantage of a certificate of deposit (CD)?

• High liquidity

• Relatively high interest rate

• No penalty for early withdrawal

• Not liquid due to set maturity dates

What is a money market deposit account (MMA)?

• A savings certificate issued by a bank or credit union

• A type of checking/savings account that requires a minimum balance and offers limited check-writing privileges

• A savings option where money is left on deposit for a specific period of time to earn a specific amount of interest

Why might someone choose to open an online savings account rather than a savings account at a traditional bank?

• Online savings accounts are less likely to make you the victim of identity theft

• Online savings accounts are created specifically for people under age 25

• Online savings accounts typically pay higher interest rates on deposits

What is a major downside of keeping all your money in a checking account?

• High interest rates

• Less accessibility

• Increased savings

• Tendency to overspend

What is the difference between a traditional savings account and an online savings account?

• Traditional savings accounts can only be accessed through ATMs, while online accounts can be accessed at any time.

• Online savings accounts require a minimum balance to open, while traditional accounts do not.
• Traditional savings accounts are managed in-person at a bank, whereas online savings accounts are managed digitally, often offering better interest rates.

Why is it better to save as soon as possible instead of waiting until later?

• More interest earning potential. It gives your money more time to grow.

• Actually, waiting is better because you'll likely make more money in the future.

• Because then you'll never have to worry about money.