Financial Services Foundations in Personal Finance Chapter 8: Ramsey Classroom Questions and Answers 100% Pass

Financial Services Foundations in Personal Finance Chapter 8: Ramsey Classroom Questions and Answers 100% Pass What is the main role of a financial institution? To manage, protect, and grow people’s money. Why is it important to understand how banks operate? So you can make informed decisions about where and how to manage your money. What is the purpose of a savings account? To keep money safe and earn a small amount of interest. How does a checking account differ from a savings account? A checking account is used for frequent transactions like paying bills and making purchases. Why should you monitor your bank account regularly? To avoid overdraft fees and detect unauthorized charges early. 2 What is a debit card connected to? Your checking account. How can overdraft fees be avoided? By keeping track of your spending and maintaining a budget. What is direct deposit? When your paycheck is electronically deposited into your bank account. Why is compound interest important for savings? It helps your money grow faster over time. What does it mean to reconcile your bank statement? To compare your personal records with your bank’s records to ensure accuracy. What is a credit union? A nonprofit financial institution owned by its members. 3 Why might someone choose a credit union instead of a bank? Credit unions often have lower fees and better customer service. What does FDIC stand for and what does it do? Federal Deposit Insurance Corporation; it protects your money in a bank up to a certain amount. How does online banking make managing finances easier? It allows you to access your account, pay bills, and transfer money anytime. Why is it important to read the terms and fees of a bank account? So you don’t get surprised by hidden charges or rules. What is a money market account? A type of savings account that usually earns more interest but has higher balance requirements.