WorksheetsSavings Tools: Advanced Level Introduction
Total questions: 20
Worksheet time: 10mins
For emergency savings, why are depository institution accounts described as liquid?
They guarantee the highest interest rate
They are generally quick and easy to withdraw money from
They require long-term commitments
They are uninsured and risky
Which pair of characteristics makes an account ideal for storing emergency savings?
High-risk and long-term
Taxable and illiquid
Secure and liquid
Uninsured and restricted
Which characteristic of a savings tool describes how quickly and easily money can be accessed without loss of value?
Interest
Liquidity
Features
Fees
Which statement best defines a checking account?
An account designed mainly for long-term saving with high interest
An account that provides an easy method for withdrawing and depositing money
A loan that must be repaid with interest
An investment account used to buy stocks
What is typically true about interest on checking accounts?
Most pay high interest rates
Most do not pay interest, and if offered, rates are low
They always match savings account interest rates
Interest is only earned when you write checks
Which feature correctly describes checking accounts at credit unions?
They are called share draft accounts
They require carrying large amounts of cash
They are recommended as the only account to save money
All types have no fees
Which statement best defines a savings account?
An account designed for frequent bill payments
An account designed to hold money not spent on current consumption
A loan used to buy expensive items
A card that provides instant credit
What is a typical characteristic of interest on a savings account?
It never earns interest
Rates are often high and unpredictable
It earns interest, but rates are often low
Interest is only paid if the account is overdrawn
Which option best explains the liquidity of savings accounts compared to other savings tools?
Less liquid than checking accounts but more liquid than other savings tools
More liquid than checking accounts and all other tools
Equally liquid as certificates of deposit
Not liquid because withdrawals are not allowed
Why is a savings account effective for emergency funds?
It allows unlimited monthly withdrawals without conditions
It provides high interest with no access limits
It is accessible and designed to hold money not for current spending
It automatically converts to a checking account during emergencies
At a credit union, a savings account is also known as a what?
Money market
Share account
Checking account
Certificate of deposit
What is a key characteristic of a money market account?
No minimum balance and fixed interest rate
Usually has minimum balance requirements and tiered interest rates
Unlimited transactions with no limits
No interest is paid
Because money market accounts have tiered interest rates, which balance would typically earn the higher rate?
$2,500 balance
$10,000 balance
Which statement best compares a money market account to a regular savings account?
Money market accounts are more liquid with lower deposit requirements
Money market accounts earn higher interest but require higher minimum balances/deposits
Savings accounts pay tiered rates while money market accounts do not
They are the same: both have no minimum to open
Which feature of CDs describes their liquidity compared with other savings tools?
Most liquid savings tool
Equally liquid as a checking account
Least liquid savings tool
Liquidity depends only on the bank’s fees
Which statement about CD features is correct?
Deposits must be held for 7 days to 10 years
Deposits can only be between 1,000and 10,000
Withdrawing early never has consequences
Risk is highest when funds are held for the full term
According to the CD features shown, what is the typical deposit range allowed for CDs?
10to 500
100to 250,000
250,000to 1,000,000
No minimum or maximum amount
Which factor directly relates to how quickly you can turn savings into cash without loss of value when choosing a savings tool?
Amount of funds available
Liquidity
Fees
Purpose of money saved
Avery wants an emergency savings fund that is easy to access. Which savings tool best fits this goal based on the example?
Certificate of deposit
Savings account
Money market account
Checking account
According to the liquidity diagram showing a trade-off, which savings tool is least liquid but typically offers the highest interest?
Checking account
Savings account
Money market deposit account
Certificate of deposit
