WorksheetsBanking and Cost of Money
Total questions: 27
Worksheet time: 21mins
The best reason for depositing your money in a bank or credit union savings account rather than "under your mattress" is that:
Most savings accounts come with a free credit card
Most savings accounts earn more interest than certificates of deposit
Money in a savings account can be access any time during day and night
Money deposited in savings accounts are FDIC insured
True or False: When banks require a minimum balance, a certain amount of money must be kept in the account at all times.
True
False
When Alex received his paycheck, he planned to cash it at a check cashing store. You would advise him to cash it at his own bank if possible because:
They typically charge high fees
They generally require a co-signer
There is likely to be a ceiling on the size of the check he can cash
They typically require a two-day waiting period before giving cash
Common bank fees include: monthly maintenance, overdraft and ATM transaction fees.
True
False
Which will most benefit you financially?
A savings account that compounds interest yearly
A savings account that compounds interest monthly
A savings account that does not compound interest
A savings account that compound interest daily
When you invest in a Certificate of Deposit, there is no penalty to withdrawing funds early.
True
False
A blank endorsement on a check:
Cancels the check
Creates a check that can be cashed by anyone
Has no effect on the check
Restricts the use of the check
Interest is:
The amount added into your savings when you open a bank account
A charge for the convenience of accessing money stored in your bank account
The amount owed for borrowing money from a bank or other lender
The money you owe the bank when they borrow your money
Which of the following typically have the highest fees?
Online bank
Credit Union
Payday lender
Retail bank
The purpose of a budget is to:
Increase the balance of your savings account
Tell you how much you owe the government in taxes
Help you spend more money
Help you plan how you will spend the money you earn or receive
A bank Certificate of Deposit is a:
Savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without penalty
Certificates of deposits that are issued for half the face value
Savings instrument that requires a deposit for a specific period of time during which there is a penalty for withdrawals
Cash deposit in a savings account that earns interest
Which of the following is a type of savings vehicle?
Money market account
Checking account
Both money market and Certificate of deposit
Certificate of deposit
Which financial product typically pays the highest rate of interest?
Money market account
Certificate of deposit
Checking account
Savings account
The last set of numbers (0025) on the check represents the:
The bank routing number
The check number
The member number
The bank account number
Angela is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she AVOID?
Personal check
Certified check
Cashier's check
Cash
The FED is short for:
FBI
Congress
The Federal Reserve
The Federal Deposit Corporatin (FDIC)
The financial institution where Mrs. Jones has her checking account will continue to pay out money for the checks she writes as long as:
There is enough money in her account to cover the amount of the checks
The financial institution has sufficient funds
She maintains a good record of deposits and handles her account responsibly
She uses checks from her checkbook
The most liquid type of financial product is:
Savings
A money market account
A checking account
A certificate of deposit
Use the Rule of 72 to calculate how long it will take for your money to double if it's earning 6% in interest:
36 years
12 years
72 years
16 years
Katie has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution?
Credit union
Savings and Loan Association
Investment club
Commercial bank
When a person is reconciling a checking account and notices that the balance in the checkbook register does not match the balance on the statement from the bank (or online statement), which action is it appropriate for the person to take first?
Deposit sufficient funds to adjust the balance in the checkbook to match the bank's balance
Determine if checks already written have cleared, since this may affect the balance
Adjust the balance in the checkbook so it is the same as the bank's balance
Notify the bank in writing to adjust the statement
The National Credit Union Administration (NCUA) insures accounts in:
Brokerage firms
Credit unions
Commercial banks
Savings banks
How can individuals be prepared for losing their job or having a large medical expense?
Maintain a checking account with sufficient funds
Prepare a budget
Save at least 3-6 months of income
Pay credit card bills on time
The term used to describe the ease and speed with which you can convert savings or an investment to cash is:
Principal
Convertibility
Liquidity
Rate of return
Money orders are:
Distributed by the Treasury Department
Available for purchase at a post office for a fee and are made payable to a specific person or company
A certified check used to pay a specified amount to a specific payee
Available for no fee at banks and retail stores
A person is depositing $20 in cash and a check for $50. On the checking account deposit slip, the person should:
Include a reason that both cash and a check are being deposited
Indicate what bank issued the check that is being deposited
List the cash deposit separately from the check, as well as the total of the deposit
Indicate the amount of money that is currently in the checking account as well as in the savings account to cover the check.
What is the order of the numbers on the bottom of the check?
Routing number, check number, account number
Check number, account number, routing number
Account number, check number, routing number
Routing number, account number, check number
