BANKING BASICS
account used for everyday spending, paying bills, debit card use
what is a checking acct?
A fee charged to your account when it lacks the funds to cover a withdrawal, but the bank allows the transaction to go through anyway
a fee paid to you for keeping your money in an account OR a fee charged to you for a loan or credit card
what is interest?
a card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check
what is a debit card?
a mobile banking tool that allows you to deposit checks to your bank account using your mobile device
what is mobile deposit?
account used to store money and earn interest
what is a savings account?
a monthly fee that some banks charge to provide access to checking or savings accounts
what is a maintenance fee?
earning interest on both the original money and previously earned interest
what is compound interest?
name one reason someone might be unbanked
Acceptable answers include:
Excessive fees
Lack of trust in banks
Not enough money to meet minimum balance requirements
venmo, cash app, apps that allow instant money transfers
what are peer to peer payment apps?
monthly record of transactions, deposits, withdrawals, and fees
what is a bank statement?
a certain amount of money that must be kept in an account as required by that particular financial institution
what is a minimum balance?
saving money automatically before spending on other things
What is "paying yourself first?"
name one disadvantage to being unbanked
Acceptable answers include:
High fees for services
No access to credit
Money not protected
Harder to save or earn interest
Name one advantage of online or mobile banking
Acceptable answers include:
24/7 access
Online bill pay
Easy balance checks
Convenience
protects deposits up to $250,000 if a bank fails
what is fdic insurance?
what are ways to avoid banking fees?
What percentage of income goes to savings in the 50/30/20 rule?
20%
true or false: prepaid cards help build credit
false
true or false: you should bank on public wi-fi
false!
why is it important to have both a checking and savings account?***
checking for easy access and spending; savings for earning interest and storing money
What happens if you opt out of overdraft protection and don’t have enough money?
the transaction is declined and no fee is charged
money set aside for unexpected expenses
what is an emergency fund?
do prepaid cards have more or fewer protections than debit and credit cards?
stores card information on a phone for contactless payments (Apple Pay, Google Pay)
what is a digital wallet?