econ banking test

Keon receives a $1,000 paycheck. According to the 50/30/20 rule, how much should he put aside for saving? a) $100 b) $200 c) $500 d)$1,000

b) $200

Tyreke has $5,000 to put into an account that earns compound interest. Which of the following is the BEST advice you can offer so that he can maximize interest? a) It's ok to open an account with a low interest rates as long as you deposit your money early b) Deposit your money as early as possible in an account with the highest interest rate possible c) Wait for interest rates to rise above 5%, otherwise compounding doesn't have any effect d) Compound interest will not have any effect at such a low dollar amount. Find different opportunities to earn interest on your savings.

b) Deposit your money as early as possible in an account with the highest interest rate possible

What is a major benefit of the Pay Yourself First strategy? a) it helps you budget all of your income for the month b) It encourages you to prioritize saving money c) It is a good way to build credit d) It generates additional income to cover essential expenses

b) It encourages you to prioritize saving money

Which of the following is a disadvantage of using a payroll card? a) You cannot withdraw your money for cash b) Many payroll cards charge fees c) You cannot use your payroll card as a debit card d) It is challenging to use a payroll card for purchases

b) Many payroll cards charge fees

All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT... a) Meeting a monthly minimum balance requirement b) Only banking online instead of using physical bank locations c) Having both a checking and savings account with the same bank d) Finding a bank that offers accounts with no monthly maintenance fee

b) Only banking online instead of using physical bank locations

Which of the following is TRUE when comparing savings accounts and certificates of deposit? a) Savings accounts are FDIC insured while certificates of deposit are not b) Savings accounts allow you to access your money at all times while certificates of deposit require your money to be left alone for a set period of time c) Savings accounts typically have a higher interest rate than certificates of deposit d) Both savings accounts and certificates of deposit allow you to deposit money at any time

b) Savings accounts allow you to access your money at all times while certificates of deposit require your money to be left alone for a set period of time

Which of the following statements is an advantage of online banking? a) Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees b) Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch c) Online banking is the only way you can make online purchases d) If you set up online banking, your bank will also file your taxes for you automatically

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

Which of the following statements is TRUE about overdraft fees? a) You are legally required to have overdraft protection for your account b) They are charged if you fail to meet the minimum balance requirement c)You are charged when more money is withdrawn from your account than it has available d) They are a one-time payment made by the bank to the account holder

c) You are charged when more money is withdrawn from your account than it has available

Which of the following is typically a feature of a savings account but not a checking account? a) Ability to withdraw money from an ATM b) FDIC insured up to $250,000 c) Your money earns interest d) Ease of making payments using a debit card

c) Your money earns interest

All of the following are ways that you can keep your online bank account safe EXCEPT... a) Only using private wifi to access your account b) Turning on text alerts to monitor your account for large or potentially fraudulent transactions c) Changing your password regularly using reasonably complex passwords d) Banking with small banks and credit unions because they are less frequently the target of fraud

d) Banking with small banks and credit unions because they are less frequently the target of fraud

All of the following are reasons to open a checking account EXCEPT... a) Making it easier to pay bills b) The ability to make purchases with a debit card c)Access to cash at an ATM d) Earn interest on your deposits

d) Earn interest on your deposits

All of the following are reasons that a person might be unbanked EXCEPT... a) Not trusting the banking system b) Not having enough available money to maintain an account c) Not having a bank within close distance to your residence d) Not having a credit card account from a traditional bank

d) Not having a credit card account from a traditional bank

What precaution can individuals take to avoid falling victim to scams on P2P payment apps? a) Avoid using P2P apps altogether b) Share their account details with friends c) Ignore all text messages from uknown numbers d) Verify the authenticity of communication by contacting the bank directly

d) Verify the authenticity of communication by contacting the bank directly

All of the following are ways to avoid ATM fees EXCEPT... a) Avoiding out of network ATMs b) Finding a bank that reimburses you for ATM fees c) Using your debit card instead of withdrawing cash to make a purchase d) Withdrawing money from your savings account instead of your checking account

d) Withdrawing money from your savings account instead of your checking account

Which of the following is an example of online bill pay? a) Using a person-to-person app to repay your friend for dinner b) Using a mobile payment service to purchase your groceries at a store c) Having your bank send your rent to the landlord each month d) Having your check direct deposited into your bank account

c) Having your bank send your rent to the landlord each month

Which of the following is usually a benefit of being a member at a credit union? a) Higher interest rates and lower fees b) Lower interest rates and higher fees c) Higher interest rates and higher fees d) Lower interest rates and lower fees

a) Higher interest rates and lower fees

Danielle is unbanked and is considering using a prepaid card. Which of the following would be BAD information to give her about prepaid cards? a) Prepaid cards are a good way to build credit because they work like credit cards b) Prepaid cards can have a lot of fees associated with them including transaction and loading fees c) Prepaid cards are generally accepted anywhere that debit and credit cards are accepted d) Prepaid cards are a viable way for the unbanked to complete online transactions

a) Prepaid cards are a good way to build credit because they work like credit cards

How much money should you try to save in your emergency fund? a) 3-6 days worth of expenses b) 3-6 weeks worth of expenses c) 3-6 months worth of expenses d) 3-6 years worth of expenses

c) 3-6 months worth of expenses

Daisy reads her bank statement and finds an error. She should... a) Do nothing. The bank will correct the error at the end of the month. b) Call the FDIC. She is insured up to $250,000. c) Call the bank. The bank will investigate the transaction to see if it was an error. d) Assume that it's a transaction that she made and forgot about.

c) Call the bank. The bank will investigate the transaction to see if it was an error.

What is the primary purpose of a digital wallet? a) Digital wallets facilitate sharing money within a group b) Digital wallets focus on contactless transactions with businesses c) Digital wallets store cash in digital form d) Digital wallets provide expense tracking for making budgets

c) Digital wallets store cash in digital form

When sending a payment using a P2P payment account, which information is typically required for the transaction? a) Social security number b) Home address c) Email address or phone number d) Passport number

c) Email address or phone number