Downsides
(22) When signing up for a new checking account you answer "No" and opt out of overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
Since you declined overdraft coverage, the bank will not allow you to overdraw your account so your debit card will be denied
(10) Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
months
(25) All of the following are downsides of being unbanked EXCEPT:
Lack of access to credit
Lost time paying bills
Lack of fees associated with banks
Lack of fees associated with banks
(17) Which of the following transactions will REDUCE your checking account balance immediately?
Writing your monthly rent check which you will mail tomorrow
Using your debit card to pay for groceries at the supermarket
Using your credit card to pay for your school books
Depositing a check at a local bank branch
Using your debit card to pay for groceries at the supermarket
(2) Which of the following is an effective strategy for personal saving?
Wait until the end of the month and save whatever is left in your checking account
Save a certain percentage of each paycheck and deposit it directly into a savings account
Cover all of your wants and needs and save whatever is left over
Take out a payday loan so you can save before you receive your paycheck
Save a certain percentage of each paycheck and deposit it directly into a savings account
(15) If inflation is _____________ your savings account interest rate then you will be ______________ purchasing power.
Higher than, losing
(6) You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…
Retirement, a house down payment, college tuition
A new cell phone, college tuition, a house down payment
A new cell phone, dinner with friends this weekend, a new bike
Retirement, college tuition, a vacation
A new cell phone, college tuition, a house down payment
(23) A person-to-person payment app could be used in each of the following scenarios EXCEPT...
Tina pays her neighbor $200 for breaking his window with a softball
Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent
Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
(18) Which of the following statements is an advantage of online banking?
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
Using online banking allows you to earn a higher interest rate
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
You can only shop online if your bank account has online banking features
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
(4) All of the following statements about bank accounts are true EXCEPT…
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
Many banks pay interest on the money you deposit into your savings account
Historically, savings accounts earn higher returns than investments in the stock market
Money in a checking account is usually easy to access via ATM, debit card or check
Historically, savings accounts earn higher returns than investments in the stock market
(13) You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
(8) When is the BEST time to start saving for your retirement?
As soon as you have your first full-time job
(5) All of the following are true about prepaid cards EXCEPT…
Prepaid cards typically include a lot of fees
Prepaid cards are a useful option for someone who is unbanked to make online purchases
Prepaid cards are a great way to build credit
Prepaid cards are usually accepted anywhere that debit and credit cards are accepted
Prepaid cards are a great way to build credit
(11) Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?
Online savings accounts are FDIC insured to a higher limit
Online savings accounts typically pay higher interest rates on deposits
Online savings accounts are less likely to make you the victim of identity theft
Online savings accounts are created specifically for people under age 25
Online savings accounts typically pay higher interest rates on deposits
(9) Which of the following has the primary purpose of enabling contactless transactions with businesses?
Money sharing apps like Venmo and CashApp
Your bank’s app like Wells Fargo or Ally Bank
A budgeting app like YNAB
A digital wallet like Google Pay or Apple Pay
A digital wallet like Google Pay or Apple Pay
(16) Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
Contact her bank immediately as it appears that her account may have been hacked
(7) Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.
Needs, wants, savings
(19) FDIC Insurance is...
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
(14) You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
It is deducted directly from your checking account
(21) How often do customers typically receive a bank statement for their checking account?
Monthly
(20) When signing up for a new checking account, you answer "Yes" to receive overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
(3) Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
30 months
(24) Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
employer, paycheck
(1) Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
Certificate of Deposit
Three of these statements best describe a checking account. Which statement best describes a savings account?
This account offers a convenient way to pay bills and access cash from an ATM
This account pays you interest on money you have put away for later to help your money grow
This account is automatically debited when you use a debit card
This account typically allows an unlimited number of transactions per month
This account pays you interest on money you have put away for later to help your money grow