Banking
What is the largest source of income for most banks?
interest
What is a balanced budget?
A budget in which income equals expenses.
What is FAFSA used to apply for?
Federal student aid, including grants, work-study, and loans.
A medium of exchange, a unit of account, and a store of value are the 3 features of ________.
MONEY
What does FDIC stand for?
Federal Deposit Insurance Company
What is one key difference between a bank and a credit union?
Banks are generally for-profit institutions; credit unions are member-owned cooperatives.
What is a fixed expense? Name one example.
An expense that usually stays the same each payment period, such as rent or a subscription.
What is one difference between a grant and a scholarship?
Grants are typically based on financial need, while scholarships may be awarded based on achievement, interests, or other criteria. Both generally do not need to be repaid when eligibility requirements are met.
What is one important difference between paying with cash and using a debit card?
Cash is physical money; a debit card generally transfers money from a linked bank account.
What is the main purpose of the FDIC?
: Automatically insures deposits in U.S. banks and savings associations—such as checking, savings, and certificate of deposit (CD) accounts—up to $250,000 per depositor, per insured bank
What is direct deposit, and how can it help account holders?
An employer or other payer electronically sends money directly to a bank account. It can make receiving pay more convenient.
What is the difference between a budget deficit and a budget surplus?
A deficit occurs when expenses exceed income; a surplus occurs when income exceeds expenses.
What is one difference between a federal student loan and a private student loan?
Federal loans are provided by the federal government and have federal terms and protections; private loans are offered by private lenders and have lender-specific terms.
What is an asset?
An asset is something of value a person owns, such as savings or a car.
What role does the Federal Reserve play in the U.S. financial system?
The Federal Reserve serves as the central bank of the United States, established in 1913 to promote a safe, flexible, and stable monetary and financial system.
What does it mean when a bank pays interest on a savings account?
The bank pays the account holder for keeping money deposited, usually at a stated rate.
What does each letter in the SMART goal-setting method represent?
Specific, Measurable, Achievable, Relevant, and Time-bound.
Why should students compare loan terms before borrowing?
Comparing interest rates, fees, repayment options, and borrower protections helps students understand the total cost and obligations.
What is a liability?
A liability is a debt or financial obligation. Liabilities reduce net worth, which is assets minus liabilities.
What is the IRS responsible for administering?
the Internal Revenue Code, which is the main body of U.S. federal statutory tax law. [1, 2]
A customer wants in-person help, low fees, and a community-focused institution. What type of financial institution best fits those needs?
Credit unions!! they are member-owned and may offer community-focused service, lower fees, or personalized support; specific features vary by institution.
A person’s monthly expenses exceed their income. Name one practical budget adjustment and explain how it could help.
For example, reduce nonessential spending or find a lower-cost option so expenses better match income.
A student can choose between grants, scholarships, work-study, and loans. Which options generally do not require repayment, and why should the student consider them first?
Grants and scholarships generally do not require repayment when eligibility terms are met. Considering these first can reduce the amount a student needs to borrow.
A person uses a debit card for a purchase. Explain how the payment differs from borrowing money with a credit card.
A debit card generally uses funds already in a linked account. A credit card borrows money that must be repaid.
What does the Bureau of Consumer Protection do?
The Bureau of Consumer Protection (part of the Federal Trade Commission, or FTC) stops unfair, deceptive, and fraudulent business practices to protect shoppers and a fair marketplace