Question

1. which account type requires you to leave your money in the bank for a set period?

a) checking account
b) savings account
c) certificate of deposit (cd)
d) prepaid account

1. what is an advantage of online - only banks?

a) they often have higher savings rates and fewer fees
b) they have more physical branches
c) they dont require internet access
d) they are not fdic - insured

1. what does \credit\ mean in banking transactions?

a) money taken out of your account
b) a fee charged by the bank
c) money added to your account
d) borrowing money with interest

1. what is direct deposit?

a) depositing cash at an atm
b) using a debit card at a store
c) withdrawing money from a teller
d) your paycheck sent electronically to your bank account

1. according to the 50/30/20 budgeting rule, what percentage should go to savings/debt?

a) 10%
b) 20%
c) 30%
d) 50%

1. what does \pay yourself first\ mean?

a) spend money on wants before needs
b) pay all your bills before saving
c) put money into savings before paying other expenses
d) only save money at the end of the month

1. what is an emergency fund used for?

a) vacation spending
b) unexpected expenses like car repairs or medical bills
c) buying luxury items
d) daily shopping

Explanation:

• Question 7: A Certificate of Deposit (CD) requires you to leave your money in the bank for a set period. Checking accounts are for daily transactions, savings accounts are more flexible than CDs, and prepaid accounts are not about leaving money for a set period.
• Question 8: Online - only banks often have higher savings rates and fewer fees as they have lower overhead costs (no physical branches). They do require internet access and are usually FDIC - insured.
• Question 9: In banking transactions, “credit” means money added to your account. Money taken out is a debit, a fee is a charge, and borrowing with interest is a loan.
• Question 10: Direct deposit is when your paycheck is sent electronically to your bank account. Depositing cash at an ATM is a regular deposit, using a debit card is a purchase, and withdrawing from a teller is a withdrawal.
• Question 11: According to the 50/30/20 budgeting rule, 20% should go to savings/debt. 50% is for needs, 30% for wants.
• Question 12: “Pay yourself first” means putting money into savings before paying other expenses. It is the opposite of paying bills first or saving at the end of the month, and it is not about spending on wants before needs.
• Question 13: An emergency fund is used for unexpected expenses like car repairs or medical bills. Vacation spending, buying luxury items, and daily shopping are not emergency - related.

Answer:

1. C. Certificate of Deposit (CD)
2. A. They often have higher savings rates and fewer fees
3. C. Money added to your account
4. D. Your paycheck sent electronically to your bank account
5. B. 20%
6. C. Put money into savings before paying other expenses
7. B. Unexpected expenses like car repairs or medical bills