Checking Accounts
What is the primary purpose of a checking account?
A checking account is primarily used for day-to-day transactions, such as paying bills, making purchases, and withdrawing money.
What is the main purpose of a savings account?
A saving account is designed to save money for future use while earning interest on the deposited funds.
What does a credit score represent?
A credit score represent your creditworthiness, indicating how risky it is to lend you money.
What is a financial Contracts?
Financial Contracts is a legally binding agreement related to money or credit such as loan, lease, or credit agreement.
What is the goal of investing?
The goal of investing is to earn a higher return on your money over time, by putting it into assets that increase in value.
What is a checking register used for?
A checking register is used to track deposits and withdrawals in a checking account, helping you monitor your balance and avoid overdrafts.
What is interest in the context of a saving account?
Interest is the money the bank pays you for keeping your funds in the saving account,typically calculated as a percentage of your balance.
What factors affect your credit score?
Factors that affect your credit score include payment history, length of credit history, and credit utilization, but checking account balances do not directly affect your credit score.
What is a lease agreement?
A lease agreement is a contract to rent property for a specified period, outlining payment terms and conditions.
What is diversification in investing?
Diversification is the practice of spreading investments across different asset types to reduce risk.
What happens if you write a check for more money than is in your account?
Writing a check for more money than is in the account results in an overdraft, which can lead to fees or penalties.
How do saving account generally compare to checking account in terms of interest rates?
Saving account generally offer higher interest rates than checking accounts to encourage saving.
What is generally considered a good credit score range?
A good credit score of 700-749 is generally considered good.
What is a loan agreement?
A loan agreement is a contract that outlines the terms of borrowing
How do bonds compare to stocks in terms of risk?
Bonds are considered a low-risk investment compared to stocks, which can be more volatile and offer the potential for higher turns.
How does a debit card work?
A debit card withdraws funds directly from your checking account when used for transactions, such as making purchases or withdrawing cash.
What is a minimum balance requirement in a savings account?
A minimum balance is the least amount you must keep in the savings account to avoid fees.
How does a high credit score benefit you?
A high credit score makes it easier to access credit with lower interest rates, saving you money on loans and credit cards.
What does it mean to reconcile a checking account?
Reconciling a checking account means comparing your check register with the bank statement to ensure that all transactions match and your account balance is accurate.
What is a Certificate of Deposit (CD), and how does it differ from a savings account?
A certificate of Deposit (CD) requires you to leave money in the account for a set period, usually offering a higher interest rate than a savings account. Unlike savings accounts, you cannot easily withdraw funds from a CD before its maturity date without incurring a penalty.
How does missing a credit card payment affect your credit score?
Missing a credit card payment negatively impacts you credit score, as it indicates a risk of not paying debts on time.