Unit 2: BM Banking

Last updated 7 months ago

30 questions

3

6

8

5

Library

Unit 2: BM Banking

Last updated 7 months ago

30 questions

3

Provide one reason that it is important to start putting money away for retirement as early as possible.

3

Melissa is a salaried employee who earns roughly the same amount in every paycheck. Why would it be a great idea for her to set up an automatic transfer every pay period into her savings account?

6

Name two reasons why it is important to check your bank statements on a regular basis.

8

Payroll cards are an alternative way for employers to pay employees when they don’t have a bank available for direct deposit. List one pro and one con of being paid by payroll cards.

5

Identify two fees that banks typically charge on a checking account and how you can avoid them.

Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?

Money Market account

Regular savings account

Checking account

Certificate of Deposit

Which of the following is an effective strategy for personal saving?

Wait until the end of the month and save whatever is left in your checking account

Save a certain percentage of each paycheck and deposit it directly into a savings account

Cover all of your wants and needs and save whatever is left over

Take out a payday loan so you can save before you receive your paycheck

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

3 months

30 months

9 months

24 months

All of the following statements about bank accounts are true EXCEPT…

If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails

Historically, savings accounts earn higher returns than investments in the stock market

Many banks pay interest on the money you deposit into your savings account

Money in a checking account is usually easy to access via ATM, debit card or check

All of the following are true about prepaid cards EXCEPT…

Prepaid cards are a useful option for someone who is unbanked to make online purchases

Prepaid cards typically include a lot of fees

Prepaid cards are usually accepted anywhere that debit and credit cards are accepted

Prepaid cards are a great way to build credit

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…

A new cell phone, dinner with friends this weekend, a new bike

Retirement, a house down payment, college tuition

A new cell phone, college tuition, a house down payment

Retirement, college tuition, a vacation

Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _________, 30% of your monthly income toward _, and 20% of your monthly income toward ________.

Needs, wants, savings

Savings, needs, wants

Needs, savings, wants

Wants, needs, savings

Which represents the BEST time to start saving for your retirement?

At age 45, so you have exactly 20 years until retirement

As soon as you have your first full-time job

Right after you pay off your student loans

Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

Which of the following statements is TRUE?

The majority of Americans have sufficient amounts of money saved for retirement

The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement

The majority of Americans have an adequate emergency fund

The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement

Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.

Weeks

Months

Days

Years

Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?

Online savings accounts are FDIC insured to a higher limit

Online savings accounts typically pay higher interest rates on deposits

Online savings accounts are created specifically for people under age 25

Online savings accounts are less likely to make you the victim of identity theft

Three of these statements best describe a checking account. Which statement best describes a savings account?

This account offers a convenient way to pay bills and access cash from an ATM

This account is automatically debited when you use a debit card

This account pays you interest on money you have put away for later to help your money grow

This account typically allows an unlimited number of transactions per month

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods

Aunt Tina only receives paper paychecks instead of direct deposit

Aunt Tina and her family have high paying jobs and don’t worry much about money

Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

Your credit card company covers the cost

It is deducted directly from your checking account

Your credit card company provides you with a cash advance to cover the cost

It is deducted directly from your savings account

Fill in the blanks: If inflation is _ your savings account interest rate then you will be __ purchasing power.

Higher than, gaining

Lower than, losing

Higher than, losing

Equal to, gaining

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

Check her wallet to be sure her debit card has not been stolen.  If she still has it, then she should not worry.

Contact her bank immediately as it appears that her account may have been hacked

Wait until her monthly statement arrives so she can check to see if those withdrawals are still there

Wait a week as it is fairly common for the bank to catch mistakes like this

Which of the following transactions will REDUCE your checking account balance immediately?

Depositing a check at a local bank branch

Using your credit card to pay for your school books

Writing your monthly rent check which you will mail tomorrow

Using your debit card to pay for groceries at the supermarket

Which of the following statements is an advantage of online banking?

You can only shop online if your bank account has online banking features

Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees

Using online banking allows you to earn a higher interest rate

Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch

FDIC Insurance is...

Insurance bank branches can buy to protect their business against fraud and scams

Required if you want to do online or mobile banking

Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business

Optional coverage consumers can purchase so that their bank deposits remain safe

When signing up for a new checking account, you answer "Yes" to receive overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

Your account will be closed

You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn

Since you requested overdraft coverage, the bank will not allow you to overdraw your account so your debit card will be denied

How often do customers typically receive a bank statement for their checking account?

Daily

Weekly

Monthly

Annually

When signing up for a new checking account you answer "No" and opt out of overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn

Since you declined overdraft coverage, the bank will not allow you to overdraw your account so your debit card will be denied

The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

Your account will be closed

A person-to-person payment app could be used in each of the following scenarios EXCEPT...

Tina pays her neighbor $200 for breaking his window with a softball

Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent

Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee

Mia pays Cheesy Pizza Co. for a pizza she orders on their website

Fill in the blanks: Direct deposit typically refers to your sending your electronically to your bank account.

employer, paycheck

state government, taxes

employer, bills

parents, allowance

All of the following are downsides of being unbanked EXCEPT:

Lack of access to credit

Difficulty making cashless purchases

Lost time paying bills

Lack of fees associated with banks

Provide one reason that it is important to start putting money away for retirement as early as possible.

Melissa is a salaried employee who earns roughly the same amount in every paycheck. Why would it be a great idea for her to set up an automatic transfer every pay period into her savings account?

Name two reasons why it is important to check your bank statements on a regular basis.

Payroll cards are an alternative way for employers to pay employees when they don’t have a bank available for direct deposit. List one pro and one con of being paid by payroll cards.

Identify two fees that banks typically charge on a checking account and how you can avoid them.

Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?

Money Market account

Regular savings account

Checking account

Certificate of Deposit

Which of the following is an effective strategy for personal saving?

Wait until the end of the month and save whatever is left in your checking account

Save a certain percentage of each paycheck and deposit it directly into a savings account

Cover all of your wants and needs and save whatever is left over

Take out a payday loan so you can save before you receive your paycheck

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

3 months

30 months

9 months

24 months

All of the following statements about bank accounts are true EXCEPT…

If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails

Historically, savings accounts earn higher returns than investments in the stock market

Many banks pay interest on the money you deposit into your savings account

Money in a checking account is usually easy to access via ATM, debit card or check

All of the following are true about prepaid cards EXCEPT…

Prepaid cards are a useful option for someone who is unbanked to make online purchases

Prepaid cards typically include a lot of fees

Prepaid cards are usually accepted anywhere that debit and credit cards are accepted

Prepaid cards are a great way to build credit

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…

A new cell phone, dinner with friends this weekend, a new bike

Retirement, a house down payment, college tuition

A new cell phone, college tuition, a house down payment

Retirement, college tuition, a vacation

Fill in the blanks with the correct responses.  If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.

Needs, wants, savings

Savings, needs, wants

Needs, savings, wants

Wants, needs, savings

Which represents the BEST time to start saving for your retirement?

At age 45, so you have exactly 20 years until retirement

As soon as you have your first full-time job

Right after you pay off your student loans

Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

Which of the following statements is TRUE?

The majority of Americans have sufficient amounts of money saved for retirement

The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement

The majority of Americans have an adequate emergency fund

The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement

Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.

Weeks

Months

Days

Years

Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?

Online savings accounts are FDIC insured to a higher limit

Online savings accounts typically pay higher interest rates on deposits

Online savings accounts are created specifically for people under age 25

Online savings accounts are less likely to make you the victim of identity theft

Three of these statements best describe a checking account. Which statement best describes a savings account?

This account offers a convenient way to pay bills and access cash from an ATM

This account is automatically debited when you use a debit card

This account pays you interest on money you have put away for later to help your money grow

This account typically allows an unlimited number of transactions per month

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods

Aunt Tina only receives paper paychecks instead of direct deposit

Aunt Tina and her family have high paying jobs and don’t worry much about money

Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

Your credit card company covers the cost

It is deducted directly from your checking account

Your credit card company provides you with a cash advance to cover the cost

It is deducted directly from your savings account

Fill in the blanks:  If inflation is _____________ your savings account interest rate then you will be ______________ purchasing power.

Higher than, gaining

Lower than, losing

Higher than, losing

Equal to, gaining

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

Check her wallet to be sure her debit card has not been stolen.  If she still has it, then she should not worry.

Contact her bank immediately as it appears that her account may have been hacked

Wait until her monthly statement arrives so she can check to see if those withdrawals are still there

Wait a week as it is fairly common for the bank to catch mistakes like this

Which of the following transactions will REDUCE your checking account balance immediately?

Depositing a check at a local bank branch

Using your credit card to pay for your school books

Writing your monthly rent check which you will mail tomorrow

Using your debit card to pay for groceries at the supermarket

Which of the following statements is an advantage of online banking?

You can only shop online if your bank account has online banking features

Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees

Using online banking allows you to earn a higher interest rate

Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch

FDIC Insurance is...

Insurance bank branches can buy to protect their business against fraud and scams

Required if you want to do online or mobile banking

Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business

Optional coverage consumers can purchase so that their bank deposits remain safe

When signing up for a new checking account, you answer "Yes" to receive overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

Your account will be closed

You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn

Since you requested overdraft coverage, the bank will not allow you to overdraw your account so your debit card will be denied

How often do customers typically receive a bank statement for their checking account?

Daily

Weekly

Monthly

Annually

When signing up for a new checking account you answer "No" and opt out of overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn

Since you declined overdraft coverage, the bank will not allow you to overdraw your account so your debit card will be denied

The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed

Your account will be closed

A person-to-person payment app could be used in each of the following scenarios EXCEPT...

Tina pays her neighbor $200 for breaking his window with a softball

Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent

Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee

Mia pays Cheesy Pizza Co. for a pizza she orders on their website

Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.

employer, paycheck

state government, taxes

employer, bills

parents, allowance

All of the following are downsides of being unbanked EXCEPT:

Lack of access to credit

Difficulty making cashless purchases

Lost time paying bills

Lack of fees associated with banks