Chapter 10 True/false Personal Finance

A certificate of deposit earns a variable interest rate for a specified length of time

False

A regular savings account pays much more interest than a certificate of deposit.

False

Month market accounts are subject to early withdrawal penalties

False

Mutual savings banks are common all across the country

False

Short-term needs include things such as home ownership, education of children, and retirement.

False

Simple interest is interest computed on the original principal plus accumulated interest.

False

Certificates of deposit are less liquid than regular savings accounts

True

Liquidity is a major advantage go regular savings accounts

True

Savings and loan associations usually offer full checking account services

True

You may be charged a service fee if you make more than a maximum number of withdrawals from your regular savings account in one month or if your balance falls below a certain minimum

True

Your goals for saving money will affect your choice of a financial institution

True

Convenience is a reason why many people choose a financial institution

True

Early withdrawal penalties are charged against certificates of deposit for withdrawals prior to maturity

True

Interest rates on money market accounts go up and down with the stock market

True

The law requires all financial institutions to tell consumers the annul percentage yield on their accounts.

True

Commercial banks offer only a few banking services and are not competitive

False

Credit unions are for-profit organizations

False

Credit unions do not provide insurance for their depositors savings

False

For use of the savers money, the financial institution pays the saved money called principal.

False

Money compounded quarterly earns more total interest than money compounded annually

True