Vocabulary!
To avoid frequent trips to the bank, you may use a __________ to withdraw cash or a check.
Automated Teller Machine (ATM)
Why is it important to review your bank statement each month?
Your bank statement includes a list of every transaction and it’s important to review this list for any mistakes. Your bank will also include any changes to the terms of your account on a bank statement.
What are the main differences between a checking and savings account?
A checking account is usually used for smaller, instant expenses.
A savings account is usually used for long term, low interest savings.
A savings account usually charges a fee for making a withdrawal.
What is one reason that someone might be unbanked?
They did not have the minimum money required.
Excessive fees.
Lack of an address.
What is the difference between a debit card and a credit card?
Debit cards only allow you to use the money that you have deposited.
A ______________ shows all of the transactions in your account and is typically sent to you once a month.
bank statement
All of the following are reasons to open a checking account EXCEPT…
Earn interest on your deposits.
How does the age that a person starts saving impact the amount they can earn in compound interest?
Compound interest is interest made from interest. Therefore, the earlier you start saving, the more time your money has to earn interest and for that interest to compound.
What are some of the disadvantages of being unbanked?
Lack of access to low interest loans.
It takes more time to pay bills.
Money is less protected than in a bank.
Missed opportunity to earn interest on your savings.
Which of the following is a disadvantage of using a payroll card?
- You cannot withdraw money
- Payroll cards charge fees
- You cannot use your payroll card as a debit card
Payroll cards often charge fees.
Your savings grow by earning __________, which is paid out as a percentage of the balance you have saved.
Interest
Daisy reads her bank statement and finds an error. She should…
Call the bank. The bank will investigate the transaction to identify the error.
What account fees should you avoid with savings accounts?
What is one option for payment that someone who is unbanked may utilize through their employer?
Paper check.
Online banking app (cashapp, zelle).
Prepaid debit card.
Which is better, compound interest or simple interest?
Compound interest.
This type of insurance protects your bank up to $ 250,000 in case the bank fails.
FDIC Insurance
What is the benefit of making sure your account is FDIC/NCUA insured?
Your money is protected. If a bank fails, the FDIC or NCUA will reimburse you for deposits up to $250,000.
Which of the following is typically a feature of a savings account but not a checking account?
-Ability to withdraw money from an ATM
-FDIC insured up to $250,000
-Your money earns interest
-Ease of making payments using a debit card
- Your money earns interest
All of the following are downsides of being unbanked except:
-Lack of credit.
-Lack of bank fees.
-Difficulty making debit and credit transactions.
Lack of bank fees
All of the following are reasons that a person might be unbanked EXCEPT:
-Not trusting the banking system
-Not having enough money to maintain an account
-Not having a credit card
To avoid an ____________, ensure that you have enough funds in your account for all of your transactions
Overdraft fee
What questions should you ask before opening an account at a national bank, community bank, or credit union? (choose all correct answers)
All of the above.
Which of the following is TRUE when comparing savings accounts and certificates of deposit?
Savings accounts are FDIC insured while certificates of deposit are not
Savings accounts allow you to access your money at all times while certificates of deposit require your money to be left alone for a set period of time
Savings accounts typically have a higher interest rate than certificates of deposit
Both savings accounts and certificates of deposit allow you to deposit money at any time
Savings accounts allow you to access your money at all times while certificates of deposit require your money to be left alone for a set period of time
What are some downsides of using a prepaid card?
-Prepaid cards do not have FDIC Insurance
-Prepaid cards do not improve your credit
-Prepaid cards can have fees for withdrawing funds, and making deposits
Why do you think that it is recommended that you save 3-6 months of your expense in an emergency fund?
If you lose your job, you will be able to pay your bills for several months while you find a new job. This might also apply to situations like short term disability or needing to care for a loved one.