WorksheetsNGPF Savings Review
Total questions: 20
Worksheet time: 11mins
What is the main advantage of a traditional savings account?
Ease of accessibility and interest earnings.
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
A relatively new type of savings account that is able to offer higher interest rates due to lower overhead costs.
What is the main advantage of a certificate of deposit (CD)?
What is the main disadvantage of a certificate of deposit (CD)?
Limited accessibility due to fixed terms and penalties for early withdrawal.
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
A relatively new type of savings account that is able to offer higher interest rates due to lower overhead costs.
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.
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.
A fee paid to you for lending your money to a bank by keeping it in a savings account OR a fee charged to you for borrowing money via a loan or credit card.
(a)
What type of interest allows for reinvesting earned interest back into the principal to allow money to grow exponentially over time.
What is the term for the original amount of money saved or invested, separate from interest or earnings.
What is the term for interest paid on the principal alone.
Fixed interest
Simple interest
Which of the following is NOT a characteristic of a savings account?
Safe place to store money
Owners can write checks from the money in the account
Money is protected by Federal Insurance
Money gains interest over time
Great way to save for something you want or an emergency
Sam saved $2,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a a few years AND wants to earn the highest interest rate?
Regular savings account
Money Market account
Checking account
Certificate of Deposit
Carrie saved $5,000 and plans to use it as a down payment for a car in the next few months. Which of these savings accounts should she utilize?
Traditional savings account
Checking account
Certificate of Deposit
How can you maximize the interest earned on a savings account?
Open a high-yield online savings account and maintain a high balance.
Open a traditional savings account with compound interest.
Withdraw funds frequently.
What is the purpose of a savings account?
To borrow money and earn interest.
To save money and earn interest.
To spend money and earn interest.
To invest money and earn interest.
A type of bank account where the bank invests the money in government and corporate securities resulting in higher interest rates for the customer. You typically have to have a large minimum balance in order to have such an account.
