Banking Basics
What account is used for everyday expenses?
Checking Account
What is the maximum credit score you can have
850
You should have at least some money saved before you start investing.
True – An emergency fund should come first.
Things that are necessary to purchase for survival, such as food, rent, and transportation, are called?
Needs
What is a stock?
Ownership in a company.
What is a summary of financial transactions over a period of time called?
Bank Statement
What is the card called that lets you borrow money to make purchases, which you pay back later?
Credit Card
Overdraft fees are free if it’s your first time.
False – Most banks still charge a fee.
What is the term for money you spend on shopping, eating out, or entertainment?
What does it mean to diversify your investments?
Spreading your money across different assets (stocks, bonds, etc.) to reduce risk.
What is a fee charged when you spend more money than you have in your account?
Overdraft fee
What is the biggest factor that affects your credit score?
Payment history.
Investing is only for rich people.
False – Many platforms allow you to start with small amounts.
The total money you earn before taxes and deductions is called what?
Gross Income
Why is it important to save and invest early?
Because your money can grow over time through compound interest.
What government agency insures deposits up to $250,000 at most banks?
FDIC
What is the percentage charged on borrowed money, such as a credit card balance or loan?
Interest Rate
Closing a credit card will always improve your credit score.
False – It can actually lower your score by reducing your credit history length and increasing utilization.
What is the difference between fixed and variable expenses?
Fixed expenses stay the same each month (like rent), variable expenses change (like groceries or entertainment)
What is compound interest?
Earning interest on both your original investment and the interest it has already earned.
What does it mean to set up direct deposit?
Your paycheck is automatically deposited into your bank account.
What are the three national credit reporting agencies?
Experian, Equifax, and TransUnion
You need to carry a credit card balance to build credit.
False – You can pay it off in full each month and still build credit.
Why is tracking your spending important?
It helps you see where your money goes, avoid overspending, and adjust your budget to reach your goals
What is the difference between a 401(k) and a regular savings account?
A 401(k) is a retirement account that may offer employer matching and tax advantages; a savings account is for short-term money and earns small interest.