Chapters 4, 5, and 6 Test

Regular savings accounts typically offer higher interest rates than high-yield savings accounts.

• True

• False

Funds from your checking account are withdrawn by writing a certified check.

• True

• False

Which of the following is an interest-paying checking account?

• Certificate of deposit (CD)

• Series EE U.S. savings bond

• Negotiable order of withdrawal (NOW) account

• Treasury bill

Money is automatically withdrawn from your account when you use a debit card.

• True

• False

What does the compounding method in savings plans do?

• Reduces savings balance over time

• Lowers the overall return

• Enhances the growth of savings through interest

• Penalizes early withdrawal

Funds invested in which of these should not be withdrawn for a stated period in order to avoid an interest penalty?

• Savings account

• U.S. Treasury bill

• Negotiable order of withdrawal (NOW) account

• Certificate of deposit (CD)

Which financial service helps manage money wisely?

• Crowdfunding

• Credit counseling

• Online and mobile banking

• Car loans

You are going on an overseas trip and want to carry checks. You should purchase:

• certified checks.

• traveler's checks.

• guaranteed checks.

• cashier's checks.

Which factor most influences the selection of a savings plan?

• Popularity of the plan

• Rate of return, liquidity, safety, and fees

• Interest rates only

• Restrictions and fees only

A Liquid CDs allows you to:

• Has interest rates that increase at set periods

• Requires no minimum deposit

• Withdrawal penalty-free

• Bases interest on inflation rates