Checking Accounts
What is a checking account primarily used for?
Answer: Everyday transactions like paying bills and making purchases
What is the main purpose of a savings account?
Answer: To save money for goals/emergencies while earning interest
On average, how many checks does an American write each year?
Answer: 36
What type of institutions/businesses does FDIC insurance protect?
Answer: Banks, Covers Deposits up to $250,000 per depositor, per bank, per ownership category
What is behavioral finance?
The study of how psychological factors and biases affect financial decisions.
Name two ways to put money into a checking account.
ATM deposit, mobile deposit, direct deposit, check deposit, cash at a teller
Name two factors to consider when choosing a new savings account.
Answer: Interest rate (APY), fees, minimum balance, FDIC/NCUA insurance, accessibility
What two numbers are needed to make an e-check payment?
Answer: Routing number and account number
Does FDIC cover investments like stocks, crypto, or life insurance?
Answer: No
What is herd behavior in finance?
Answer: Following the crowd’s actions, often leading to bubbles or crashes
What’s one way to avoid overdraft fees?
Don’t spend more than your balance; monitor your account; opt out of overdraft service
What type of account pays higher interest but requires you to leave your money in for a set time?
Answer: Certificate of Deposit (CD)
What type of transfer is fastest and most secure for large transactions?
Answer: Wire transfer
What does NCUA stand for, and what does it insure?
Answer: National Credit Union Administration; insures deposits in credit unions up to $250,000
Name one step someone can take to overcome cognitive bias.
Learn to recognize common biases, slow down decision-making, seek outside perspectives
What does NSF mean in Banking?
Historically speaking, what does the S&P 500 return on average annually (in percentage terms).
Answer: 8-10%
Example Answer:
___-___ Days.Answer: 2-6 Days
Big Bank or Credit Union?
What percentage of people make purchases due to FOMO?
A: 40%
B: 50%
C: 60%
D: 70%
Answer: C: 60%
In 2025, what is the national average interest rate on a checking account?
A: 0.045%
B: 0.45%
C: 0.70%
D: 0.07%
Answer: D: 0.07%
What is the difference between compound interest and simple interest, and why does compound interest have a greater impact on long-term investments?
Answer:
Simple interest is calculated only on the original principal.
Compound interest is calculated on both the principal and the accumulated interest over time.
Compound interest grows money exponentially, making it far more powerful for long-term investing
How many business days do international wire transfers usually take to clear?
Answer Example: x to x business days.
Answer: 1 to 5 business days
In 2025, what is the national average interest rate on a U.S. Savings Account?
A: 0.37%
B: 0.38%
C. 0.39%
D. 0.40%
Answer: 0.38%
Define Sunk Cost Fallacy in Behavioral Finance.
Answer: When the fact that a cost has already been incurred and cannot be recovered affects ones decision, often financially.