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WorksheetsBanking Assignment
Total questions: 38
Worksheet time: 27mins
Juan
saved $1,000 from his summer job cleaning pools. Which of these account typeswould work best for him if he doesn't need access to the money for a number of yearsAND wants to earn the highest interest rate?
regular savings account
Money Market account
Checking account
Certificate of Deposit
All of the following are true about prepaid cards EXCEPT…
Prepaid cards typically include a lot of fees
Prepaid cards are a useful option for someone who is unbanked to make online purchases
Prepaid cards are a great way to build credit
Prepaid cards are usually accepted anywhere that debit and credit cards are accepted
Which of these is a reason someone might choose to open an online savings accountrather than a savings account at a traditional bank?
Online savings accounts are FDIC insured to a higher limit
Online savings accounts typically pay higher interest rates ondeposits
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
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 forlater 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 payfor 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
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
When
signing up for a new checking account, you answer "Yes" to receive overdraftprotection. On this day, you have $10 in your account and go out and use your debit cardto buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be theoutcome resulting from these transactions?
Your account will be closed
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
Since you requested overdraft protection, the bank will not allow you to overdrawyour account so your debit card will be denied
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
often do customers typically receive a bank statement for their checking account?
Daily
Weekly
Monthly
Annually
When
signing up for a new checking account you answer "No" and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
You will likely be charged an overdraft fee for one or more of the transactions andalso will need to repay the bank for the amount overdrawn
Your account will be closed
Since you declined overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
The bank will provide you five days to add funds to your account to cover theoverdraft and no fees will be assessed
Fill
in the blanks: Direct deposit typically refers to your ______ sending your ______electronically to your bank account.
employer, bills
employer, paycheck
parents, allowance
state government, taxes
All of the following are downsides of being unbanked EXCEPT:
Lack of access to credit
Lost time paying bills
Lack of fees associated with banks
Difficulty making cashless purchases
People who are unbanked are most likely to...
Have a high credit score
Have a low income
Have a college degree
Have a mortgage
Overdraft protection...
Allows you to withdraw more money than you have in your account
Protects your account from unauthorized transactions
Helps you save money for emergencies
Provides insurance for your deposits
Which of the following is TRUE about banks and credit unions?
Banks are for-profit institutions, while credit unions are non-profit
Banks offer higher interest rates on savings accounts than credit unions
Credit unions are insured by the FDIC, while banks are not
Banks are owned by their customers, while credit unions are owned by shareholders
Which of the following is NOT required to open a checking account?
Proof of identity
Proof of address
Social security number
Minimum age requirement
What feature is the LEAST important for a college student to look for in a checking account?
Low or no monthly fees
Convenient ATM access
High interest rates
Online and mobile banking
What is a typical overdraft fee?
$10
$35
$50
$100
How can you protect your checking account when using online and mobile banking?
Use strong and unique passwords
Avoid using public Wi-Fi networks
Regularly monitor your account activity
All of the above
Why is understanding a bank's fees particularly important for students or young adults?
They are more likely to have a low income
They are more likely to have a high credit score
They are more likely to have a mortgage
They are more likely to have a college degree
About how much should you save in an emergency fund?
1 month of expenses
3 months of expenses
6 months of expenses
1 year of expenses
What are some reasons for why so many Americans live paycheck-to-paycheck?
Low wages
High cost of living
Lack of financial education
All of the above
How is compound interest different than simple interest?
Compound interest is calculated on the initial amount only
Compound interest is calculated more frequently
Simple interest is calculated more frequently
Simple interest is calculated on the initial amount only
Saving accounts differ from checking accounts in that...
Saving accounts have higher interest rates
Saving accounts have more fees
Saving accounts have unlimited transactions
Saving accounts have overdraft protection
TRUE or FALSE:
Checks and debit cards allow you to access your bank funds on the spot, when shopping or dining out.
TRUE
FALSE
All of the following are reasons to open a checking account EXCEPT…
Making it easier to pay bills
The ability to
make
purchases with a debit card
Access to cash at an ATM
Earn interest on your deposits
Which of the following is usually a benefit of being a member at a credit union
?
Higher interest rates and lower fees
Lower interest rates and higher fees
Higher interest rates and higher fees
Lower interest rates and lower fees
Daisy reads her bank statement and finds an error. She should…
Do nothing. The bank will correct the error at the end of the month.
Call the FDIC. She is insured up to $250,000.
Call the bank. The bank will investigate the transaction to see if it was an error.
Assume that it’s a transaction that she made and forgot about
.
Which of the following is typically a feature of a savings account but not a checking
account?
Ability to withdraw money from an ATMFDIC insured up to $250,000
Your money earns interest
FDIC insured up to $250,000
Ease of making payments using a debit card
Tyreke has $5,000 to put into an account that earns compound interest. Which of the
following is the BEST advice you can offer so that he can maximize interest?
It’s ok to open an account with a low interest rates as long as you deposit your
money early
Deposit your money as early as possible in an account with the highest interest rate
possible
Wait for interest rates to rise above 5%, otherwise compounding doesn’t have any
effect
Compound interest will not have any effect at such a low dollar amount. Find
different opportunities to earn interest on your savings.
Which of the following is TRUE when comparing savings accounts and certificates of
deposit?
Savings accounts are FDIC insured while certificates of deposit are not
Savings accounts allow you to access your money at all times while certificates of
deposit require your money to be left alone for a set period of time
Savings accounts typically have a higher interest rate than certificates of deposit
Both savings accounts and certificates of deposit allow you to deposit money at
any time
Which of the following statements is TRUE about overdraft fees?
You are legally required to have overdraft protection for your account
They are charged if you fail to meet the minimum balance requirement
You are charged when more money is withdrawn from your account than it has available
They are a one-time payment made by the bank to the account holder
All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT...
Meeting a monthly minimum balance requirement
Only banking online instead of using physical bank locations
Having both a checking and savings account with the same bank
Finding a bank that offers accounts with no monthly maintenance fee
All of the following are ways to avoid ATM fees EXCEPT…
Avoiding out-of-network ATMs
Finding a bank that reimburse you for ATM fees
Using your debit card instead of withdrawing cash to make purchase
Withdrawing money from your savings account instead of your checking account
Why is it important to start putting money away for retirement as early as possible?
Name 2 reasons why it is important to check your bank statements on a regular basis.
Identify 1 fee that banks typically charge on a checking account and how you can avoid them
