Bank or Credit Union
Profit-focused (number one goal is to make money)
Bank
Account where the main purpose is to save money. Earns a modest interest rate and has limited withdrawals per month.
Savings Account
What is a service you could find at both a bank and a credit union?
Loans/mortgages, checking, savings, CDs, ATM, debit cards, overdraft protection
How easily an asset can be turned into cash is referred to as...
Liquidity
Owned and operated by its members
Credit Union
Account used for everyday transactions. No transaction limit, often tied to a debit card.
Checking Account
The FDIC
Which has a higher liquidity, a savings account or a certificate of deposit?
Savings account
Offers lower (cheaper) interest rates on loans.
Credit Unions
Hybrid checking/savings account. Allows for check writing and earns interest. Often has a higher minimum balance.
Money Market Account
Who insures (protects) credit unions?
The NCUA
Sort these assets from highest liquidity to lowest liquidity. House, checking account, cash, savings account
1. cash 2. checking account 3. savings 4. House
Often has more physical and ATM locations
Bank
Time based savings account. Earns a guaranteed fixed interest rate. Penalty if money is withdrawn early.
Certificate of Deposit (CD)
A financial institution will continue to pay out money for checks from you checking as long as...
True/False: You can have a debit card attached to a savings account
More likely to be local
Credit Union
If I wanted to open account that would let me write checks as well save and earn interest over time, what type of account should I open?
Money Market Account
What is something a bank/credit union will ask you for before you open an account?
Proof of identification, address, SSN, passport
By moving money from a checking account that doesn't give interest to a CD a person is sacrificing some
A. earnings for safety
B.safety for liquidity
C. liquidity for earning
D. dividends for safety
C. Liquidity for earning. Money is now harder to get to, but it will grow in value more