WorksheetsBanking Unit Review
Total questions: 27
Worksheet time: 14mins
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
Saving money for retirement
One difference between a checking account and a savings account is that...
Checking accounts typically offer higher interest rates
Savings accounts offer more flexibility for daily purchases
Checking account balances will typically change frequently
Savings accounts usually have a debit card and checks
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 rate 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.
What is the most frequently charged fee on checking accounts?
ATM fees
Overdraft fees
Monthly maintenance fees
Statement fees
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 reimburses you for ATM fees
Using your debit card instead of withdrawing cash to make a purchase
Withdrawing money from your savings account instead of your checking account
Keon receives a $1,000 paycheck. According to the 50/30/20 rule, how much should he put aside for saving?
$100
$200
$500
$1,000
What is a major benefit of the Pay Yourself First strategy?
It helps you budget all of your income for the month
It encourages you to prioritize saving money
It is a good way to build credit
It generates additional income to cover essential expenses
How much money should you try to save in your emergency fund?
3-6 days worth of expenses
3-6 weeks worth of expenses
3-6 months worth of expenses
3-6 years worth of expenses
Which of the following is an example of online bill pay?
Using a person-to-person app to repay your friend for dinner
Using a mobile payment service to purchase your groceries at a store
Having your bank send your rent to the landlord each month
Having your check direct deposited into your bank account
Which of the following statements is an advantage of online banking?
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch
Online banking is the only way you can make online purchases
If you set up online banking, your bank will also file your taxes for you automatically
All of the following are ways that you can keep your online bank account safe EXCEPT...
Only using private wifi to access your account
Turning on text alerts to monitor your account for large or potentially fraudulent transactions
Changing your password regularly using reasonably complex passwords
Banking with small banks and credit unions because they are less frequently the target of fraud
Which of the following is an effective strategy for personal saving?
Wait until the end of the month and save whatever is left in your checking account
Save a certain percentage of each paycheck and deposit it directly into a savings account
Cover all of your wants and needs and save whatever is left over
Take out a payday loan so you can save before you receive your paycheck
All of the following statements about bank accounts are true, EXCEPT...
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
Many banks pay interest on the money you deposit into your savings account
Historically, savings accounts earn higher returns than investments in the stock market
Money in a checking account is usually easy to access via ATM, debit card or check
You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for...
Retirement, a house down payment, college tuition
A new cell phone, college tuition, a house down payment
A new cell phone, dinner with friends this weekend, a new bike
Retirement, college tuition, a vacation
Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward ____________, 30% of your monthly income toward ____________, and 20% of your monthly income toward ____________.
(a)
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 for later 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 pay for 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
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
Wait a week as it is fairly common for the bank to catch mistakes like this
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
Contact her bank immediately as it appears that her account may have been hacked
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
Which of the following statements is an advantage of online banking?
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
Using online banking allows you to earn a higher interest rate
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
You can only shop online if your bank account has online banking features
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 overdraft coverage. On this day, you have $10 in your account and you 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?
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 coverage, 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 the overdraft and no fees will be assessed
Which of the following is a reason to use a savings account rather than a checking account?
Easy access to funds for daily transactions
Unlimited check writing privileges
Higher interest rates on deposits
Lower minimum balance requirements
When signing up for a new checking account you answer "No" and opt out of overdraft coverage. 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?
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 declined overdraft coverage, 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 the overdraft and no fees will be assessed
All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT...
Maintain a minimum balance
Set up monthly direct deposits
Have a checking and savings account at the same bank
Choose paperless statements
All of the following are benefits of using a checking account EXCEPT...
Multiple options for using funds to make payments
Checking accounts act as a good savings vehicle
Access to cash via ATMs
Your money is protected by FDIC insurance
