Bank Accounts
Which bank account(s) has unlimited deposits?
Checking, savings, HYSA
(not CD)
What is a 529 used for?
Education expenses
Agree / Disagree - Interest is always beneficial to you. Explain why. :)
Disagree - debt is a thing. If you have credit card debt, you have to pay the credit card company interest.
Agree / Disagree - Use an emergency fund to grow wealth. Explain why.
Disagree - Your e-fund needs to be accessible (high liquidity) and guaranteed (no risk). The best wealth-building methods include risk and often are not very liquid (for example, an IRA).
What is the difference between a 401k and a 403b?
Both are employer-offered retirement accounts. 401k is through a for-profit employer; 403b is through a not-for-profit employer.
What is FDIC insurance AND what is its $ amount?
Coverage for your bank account if a bank fails. $250,000
Agree or disagree - Bank accounts are a good wealth builder.
Disagree! Interest / return is too low.
What is inflation?
The value of money decreases over time. This leads to goods and services becoming more expensive.
Define liquidity.
How easy it is to convert an asset to cash.
Order the following by liquidity (HIGH to LOW):
Checking account, CD, savings account, 401(k)
Checking, savings, CD, 401(k)
Which bank account(s) have the highest interest?
HYSA (and CD)
What account is a bundle of stocks that is actively managed?
Mutual fund
List 3 ways to get a bigger investment (think time, interest rate, deposits, etc.)
Higher initial deposit (principal)
Higher interest rate (or rate of return)
Higher compounding frequency (compound more often)
Longer time invested
Continuing to deposit money
As retirement approaches, what should you do with your investments?
Lower your risk (by switching to bonds, CDs, HYSA but not all at once)
Which is an ETF *most* similar to?
Savings account, Bonds, Index fund, Crypto
Index fund
Which bank account(s) has a maturity date AND what is a maturity date?
CD. You cannot withdraw money before this date (without penalty).
What is the main benefit of diversifying your investments?
Decrease risk
What is principal when it comes to investing?
The amount you deposit.
Agree / Disagree – Diversifying your money increases risk. Explain why.
Disagree! Don’t put all your eggs in one basket (like only investing in one stock). This is the opposite of diversification.
Instead, invest in different companies and different types of accounts.
Which accounts have FDIC insurance?
Checking, savings, HYSA, CD
Write down 4 ways of avoiding a monthly bank account fee.
Maintain a minimum daily balance
Use a student account which links to a parent/guardian’s account
Meet an age requirement
Meet a direct deposit minimum requirement, example $500 per month
Be a veteran or serve in the armed forces
Have a mortgage or loan through the bank
Use a debit card to make purchases a certain number of times every month
What account represents many stocks and mimics the behavior of the stock market?
Index fund
What's the most important thing when it comes to interest and building wealth?
Start early!
Agree / Disagree – When investing in individual stocks, index funds, AND mutual funds, risk decreases with longer investments. Explain why.
Agree - over time ups and downs in the market balance out, but in general historically the market has gone up (when looking at time periods longer than a decade)
Order the following by diversification (HIGH to LOW):
Mutual fund, Individual stock, Index fund
Index fund, mutual fund, individual stock