Checking Accounts
What is a checking account primarily used for?
A checking account is primarily used for everyday transactions such as deposits, withdrawals, and payments.
What is the primary purpose of a savings account?
The primary purpose of a savings account is to save money and earn interest on the balance.
What is a deposit?
A deposit is money placed into a bank account.
What is credit?
Credit is the ability to borrow money or access goods or services with the promise to pay late
Name one advantage of having a checking account
One advantage is easy access to funds for daily expenses.
What is typically the interest rate like on a savings account compared to a checking account?
The interest rate on a savings account is usually higher than that of a checking account.
What does it mean to withdraw money from an account?
To withdraw money means to take funds out of a bank account.
What is a credit score?
A credit score is a numerical representation of a person's creditworthiness.
What is the difference between a debit card and a credit card?
A debit card withdraws money directly from a checking account, while a credit card allows borrowing money up to a limit.
What is a common restriction associated with savings accounts?
A common restriction is a limit on the number of withdrawals or transfers that can be made per month.
What are electronic payments?
Electronic payments are transactions made through digital means, such as online transfers or mobile payment apps.
Name one type of credit service.
One type of credit service is a credit card.
What is an overdraft fee?
An overdraft fee is a charge for withdrawing more money than is available in a checking account.
How can having a savings account help in financial planning?
A savings account helps in financial planning by setting aside funds for future expenses or emergencies.
Name one method of making a deposit.
One method of making a deposit is using an ATM (Automated Teller Machine).
What can happen if someone fails to make credit card payments on time?
Late payments can lead to fees, higher interest rates, and a negative impact on credit scores.
Describe how online banking can benefit checking account users.
Online banking allows for easy monitoring of account activity, bill payments, and fund transfers from anywhere.
Explain the concept of compound interest in relation to savings accounts.
Compound interest is the interest calculated on both the initial principal and the accumulated interest from previous periods, leading to growth in savings over time.
How does a check work as a form of payment?
A check is a written order to a bank to pay a specific amount of money from the writer's account to the person named on the check.
Explain the importance of maintaining good credit.
Maintaining good credit is important because it affects the ability to borrow money, obtain loans, and secure better interest rates.