WorksheetsBanking - Unit Test
Total questions: 31
Worksheet time: 23mins
Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
Regular savings account
Money Market account
Checking account
Certificate of Deposit
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
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
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
Which represents the BEST time to start saving for your retirement?
As soon as you have your first full-time job
Right after you pay off your student loans
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
At age 45, so you have exactly 20 years until retirement
Which of the following statements is TRUE?
The majority of Americans have an adequate emergency fund
The majority of Americans have sufficient amounts of money saved for retirement
The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement
The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement
Experts recommend that you accumulate enough to cover 3 to 6 _____
of expenses in your emergency fund.
Weeks
Years
Which of these is a reason someone might choose to open an online savings account rather 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 on deposits
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 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 overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
Aunt Tina and her family have high paying jobs and don’t worry much about money
Aunt Tina only receives paper paychecks instead of direct deposit
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 receives a text alert from the bank that her account balance has dropped below a certain threshold. She has not used her ATM in over a week and wonders what steps she should take next.
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
How 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 coverage.
On this day, you have $12 and a movie ticket that costs $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
Which of the following scenarios is least likely to involve the use of a person-to-person payment app?
Emily transfers $50 to her friend for concert tickets they bought together
John uses a payment app to pay his monthly utility bills directly to the service provider
Sarah collects money from her friends for a group gift using a payment app
Mike reimburses his colleague for lunch using a payment app
Direct deposit typically refers to your _____ sending your _______ electronically to your bank account.
parents, allowance
state government, taxes
26. Provide one reason that it is important to start putting money away for retirement as early as possible.
To take advantage of compound interest
To avoid taxes
To spend more money now
To rely on social security
27. Melissa is a salaried employee who earns roughly the same amount in every paycheck. Why would it be a great idea for her to set up an automatic transfer every pay period into her savings account?
To ensure consistent savings without manual effort
To avoid spending money on unnecessary expenses
To take advantage of interest rates
To meet her monthly budget goals
Name two reasons why it is important to check your bank statements on a regular basis.
To detect unauthorized transactions and monitor account balance
To increase bank fees and reduce account security
To avoid paying taxes and hide financial activities
To ensure bank errors and increase spending
Identify two fees that banks typically charge on a checking account and how you can avoid them.
Overdraft fees and monthly maintenance fees; avoid by keeping a minimum balance and opting for overdraft protection.
ATM fees and paper statement fees; avoid by using in-network ATMs and opting for electronic statements.
Foreign transaction fees and wire transfer fees; avoid by using a bank with no foreign transaction fees and using online transfers.
Check fees and account closure fees; avoid by using electronic payments and maintaining the account.
Questions he should ask before opening an account.
What are the fees associated with the account?
What is the interest rate offered?
Are there any minimum balance requirements?
All of the above
Three ideas on how best to manage his account.
Set a budget, track expenses, and review statements regularly.
Ignore the account, spend freely, and never check statements.
Only deposit money, never withdraw, and avoid online banking.
Use cash only, avoid credit cards, and never save receipts.
Three features of online and mobile banking that he should use.
Checking account balance
Transferring funds
Paying bills
All of the above
How to start saving and good strategies to achieve this goal.
Create a budget and track expenses
Spend more than you earn
Ignore financial goals
Rely solely on credit cards
What is the difference between a credit card and a debit card?
A debit card is issued by the bank. A credit card is not.
A debit card can only be used at an ATM. Credit cards can only be used in stores or on-line.
A debit card takes money directly from your banking account; while using a credit card is a form of borrowing.
Debit card users must pay interest to banks; credit card users collect interest from banks.
Which of the following is a benefit of using a budgeting app?
It guarantees savings on all purchases
It eliminates the need for a bank account
It helps track your spending and manage your finances more effectively
It automatically increases your income
Why is it important to have an emergency fund?
To cover unexpected expenses without relying on credit
To invest in high-risk stocks
To avoid paying taxes
To pay off all your debts immediately
