Understanding Banking Basics Quiz

What is the main purpose of a checking account?

• To earn high interest on your savings

• To manage daily transactions and payments

• To invest in stocks and bonds

• To pay off loans

Which of the following is typically required to open a checking account?

• A credit card

• State/Federal ID and Social Security Number

• A car title

• A mortgage

What does FDIC/NCUA insurance protect?

• Your investments in the stock market

• Your bank deposits up to $250,000

• Your car loan

• Your credit card balance

What do the numbers at the bottom of a personal check represent?

• The check amount and date

• The routing and account numbers

• The payee and memo

• The bank’s phone number

Which of the following is considered a liability when calculating net worth?

• Savings account balance

• Car loan

• House value

• Jewelry

What is the principal in a loan?

• The total interest paid

• The original amount borrowed

• The monthly payment

• The loan term

Which of the following is a common fee you might see on a bank statement?

• ATM fee for using an out-of-network ATM

• Grocery store fee

• Utility bill fee

• Car maintenance fee

What is one noticeable difference between an IRA and a 401(k)?

• Only IRAs are offered by employers

• 401(k)s are typically employer-sponsored, while IRAs are opened individually

• Only 401(k)s offer tax benefits

• IRAs have no contribution limits

Which of the following actions can help decrease your loan interest rate?

• Making late payments

• Having a good credit score

• Borrowing more than you need

• Ignoring your credit report

Why are secured loans considered less risky to the lender?

• They have higher interest rates

• Lenders can take valuable collateral if you fail to repay

• They require no documentation

• They are always for small amounts