Personal Finance Ch. 5

False

True or False: A CD is considered to be very liquid

False

True or False: A US Savings Bond is the most liquid type of saving plan

True

True or False: A common mistake in managing money is not having enough liquid assets to pay current bills

True

True or False: A credit union and a bank offer many of the same services

False

True or False: A credit union is owned by its shareholders

True

True or False: A debit card transaction should be subtracted from the check register balance

False

True or False: A direct deposit should be subtracted from the check register balance

True

True or False: ATM access is an example of an electronic banking service

False

True or False: An ATM withdrawal should be added to the check register balance

True

True or False: Higher returns on savings usually result in less liquidity

False

True or False: Insurance is not considered to be a financial service

True

True or False: The FDIC and NCUA offer insurance to depositors

True

True or False: When considering the convenience of a financial service, you should also consider the service fees of that service

True

True or False: When interest rates are falling, you want to take out short term loans

True

True or False: When interest rates are rising, use long-term loans to take advantage of current low rates

False

True or False: a regular savings account offers a higher rate of return than other plans

False

True or False: an investment company is a deposit-type financial institution

Check Register

Used to keep track of checking account transactions

Rate of return, compounding interest, inflation, restrictions, fees, liquidity, safety (FDIC and NCUA), tax considerations

What are a few things you should consider when deciding which type of savings plan to choose?

Regular, CDs, NOW, money market, and US Bonds

What are the five types of savings plans?

Cashier's check

A check from a financial institution you get by paying the face amount plus a fee

NOW Account

A checking account that pays interest

Truth in Savings Law

A law that requires disclosure of information and establishes rules for advertising accounts is called...

Certified check

A personal check with guaranteed payment

reconciliation

Bringing your check register in line with the bank's records is

$250,000

How much do the FDIC and NCUA currently insure deposits?