Chapter 8 Personal Finance
Manage; safe
A bank can help you _____ your money and keep it _____.
True
A debit card linked with your checking account is a good option for regular spending.
Online banking
A debit card, ATM access, payroll direct deposit, and checks are basic features of ___________.
Long-term savings goals
A savings account is for ___________.
retail bank
A traditional brick and mortar bank is what kind of bank?
Monitor your account at least twice a week
An easy way to avoid ending up with errors in your checking account is to simply . . .
Your
As the owner of your account, managing your money is ______ responsibility.
They both get easier and build money confidence the more you do them
Balancing your checking account is a lot like working on your budget because . . .
Earn interest, keeping all of it as their own profit
Banks invest their customers' deposited money and then . . .
True
Credit Unions differ from retail banks in that they typically require membership based on specific criteria.
Not having a savings or checking account
Distrust, unemployment, and bank fees are a few excuses people give for . . .
A small, local bank is often a great option
If you prefer great customer service and lower fees . . .
It hasn't been fully processed yet
If you see "pending" on an account charge, that means. . .
True
If you see a charge you don't recognize, you should report it to your bank immediately.
Fees and services involved
It's your responsibility to know about all of the _______ before choosing a bank.
How quickly and easily you can access your money
Liquidity is . . .
ATM locations; a mobile banking app
Make sure your bank has plenty of ______ and ______.
unbanked
Many Americans are ___________________, meaning they don't have a bank account
Laziness
Over drafting your checking account is a sign of...
But you have to pay back the deposited money with interest
Overdraft protection sounds like a good idea . . .
False
Overdrafting your account is a sign of diligence and responsibility.
True
People who are struggling with money often turn to alternative financial services like payday loans, but these services actually end up causing them to lose money.
Mortgages, check writing, and debit cards
Some of the services banks offer include . . .
You end up losing money with all of them
Something that all of the predatory financial services have in common is . . .
$250,000
The Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) keep your money in the bank insured up to ______ per account.
Reconciling your account
Verifying your bank's online account statements for accuracy is called ____________.
fees, loans, and investments
What are the three ways banks make money?
The bank doesn't allow you to open an account because you handled money poorly in the past and couldn't pass their financial background check.
What does it mean to be blacklisted by a bank?
What kind of accounts you want
When deciding on the right bank for you, you should first identify what type of bank you want, the features that matter most to you, and ____________.
money market account
Which bank service would typically offer the highest interest rate?
Interest on savings balance
Which of the following is not a way that banks make money?
Withdrawing your money early
With certificates of deposit (CDs), you have to pay a penalty for ____________.
It's often more difficult to get in touch with a real person when you need assistance
With online banks, all of your deposits, transfers, and bill payments happen digitally, but . . .
Debit card purchases, third-party app transactions, and ATM withdrawals
You need to track everything that involves money, including . . .
Debt
You should avoid any bank service that leads to . . .
False
Your emergency fund should go in your checking account, NOT a money market account.
Bank
a financial institution licensed to receive deposits and provide financial services
overdraft fee
a penalty charged if the account holder spends more than the available balance, causing the available balance to go below zero
checking account register
also called a ledger; a lined and divided journal to record checking account activity
online banks
also known as internet banking; all transactions done online; no physical location
overdraft protection
an option offered by banks to cover overspending an account and then charge a fee for it
retail banks
for-profit financial institutions that accept deposits and offer a variety of deposit accounts and financial services
Liquidity
how quickly you can access the money in an account or the value of an asset without a penalty or fee
Federal Deposit Insurance Corporation (FDIC)
independent federal agency that insures deposits in bank accounts up to $250,000
National Credit Union Administration (NCUA)
independent federal agency that supervises federal credit unions and insures depositor's money in credit unions up to $250,000
credit unions
nonprofit financial institutions that are owned and operated by their members; offer deposit accounts and lending services similar to a retail bank but at a lower cost
direct deposit
option to allow automatic electronic deposit of your payroll checks
Unbanked
people who don't have bank accounts
Underbanked
people who have savings or checking accounts but still use the alternative financial products and services
reconciling
the process of making sure you and the bank agree on how much money is in your checking account
