Checking Accounts
What is the primary function of a checking account?
Daily transactions and short-term spending.
What is the main purpose of a savings account?
To store money and help it grow by earning interest.
What fee happens when your account goes below zero and the bank still pays a bill?
Overdraft Fee
What does it mean when a person or family is “unbanked”?
They don’t have a checking or savings account
What does “financial planning” mean?
Making a plan to manage your money and reach your goals.
Which method is the most common way for an employer to pay a paycheck into a checking account?
Direct Deposit
What type of savings account locks your money for a set time but pays a higher interest rate?
Certificate of Deposit (CD)
What fee is charged when you don’t have enough money in your account to cover a payment?
Insufficient Funds (NSF) Fee
What do we call people who have a bank account but still use check-cashing or payday loan stores?
Underbanked
What’s the difference between a deposit and a withdrawal?
A deposit puts money in; a withdrawal takes money out
When writing a check, what is considered the official, legally binding amount if the numeric amount and the written amount conflict?
The written amount (amount written out in words).
What does APY tell you about a savings account?
How much your money will grow in one year.
How can you avoid paying a monthly fee on your checking account?
Keep the minimum balance your bank requires.
How much money does the FDIC insure in a bank account per person?
Answer: $250,000
In the 50/30/20 rule, what percent of income should go to needs like rent and food?
50%
A check is considered invalid and can be rejected by a bank if it is missing which critical component?
The signature.
What does “Pay Yourself First” mean?
Save part of your income before spending on other things.
What security feature asks for two or more ways to prove who you are when logging in?
Multi-Factor Authentication (MFA)
Why is it important to have a bank account?
It keeps your money safe and makes it easier to pay bills or get paid
In the 50/30/20 rule, what is the 20% category used for?
Savings and paying off debt.
What is the most serious risk of writing a "blank check"?
Anyone possessing it can fill in any amount and name, potentially leading to unauthorized withdrawals or fraud.
How much money do most experts say you should keep in an emergency fund?
Enough to cover 3–6 months of living expenses.
What document shows your deposits, withdrawals, and any fees from your bank account?
Bank Statement
What kind of places offer check-cashing or payday loans, often with high fees?
Alternative financial services (like check-cashing stores or payday lenders).
What kind of situation should an emergency fund be used for?
Real emergencies like losing your job or a medical bill