FINANCIAL LITERACY TEST AND
ANSWERS.
Compound Interest - Answers-The interest you earn on top of interest
How does a 1% interest rate impact the power of compounding? - Answers-It reduces
the power of compounding the interest given.
What's the main difference between a checking account and savings account? -
Answers-Checking account is made for easy access and spending.
Savings account is made for investments and are made to be particularly inaccessible.
What is NCUA and FDIC? - Answers-NCUA: insures credit union accounts (generally
used for credit union accounts)
FDIC: provides federal insurance for bank accounts (generally used for bank accounts)
How can you maximize your interest? - Answers-Depositing money as soon as possible
in order to maximize your interest.
Tiered Interest - Answers-A tiered interest rate is the amount of interest depending on
the bank account.
How can you avoid a monthly maintenance fee? - Answers-By opening both a checking
and savings account at the same bank, setting up a monthly direct deposit, or choosing
a checking or savings without a monthly fee.
What is the average fee charged by large banks for using an out-of-network ATM? -
Answers-$4.73
What is an excessive transactions fee? - Answers-An excessive transaction fee is a fee
that happens when savings account holders withdraw over the federal limit. (The federal
limit being six free withdrawals and transfers per month.)
What is an overdraft fee? - Answers-An overdraft fee is when you get charged (by
choice) when borrowing the money the bank lends you when you don't have enough
money to make a transaction
How much money are you recommended to save? - Answers-You are recommended to
save 20% of your income.
What categories encompass the portion of your paycheck that is designated for saving?
- Answers-Putting money away in a retirement account
Building an emergency fund
Saving for higher education
ANSWERS.
Compound Interest - Answers-The interest you earn on top of interest
How does a 1% interest rate impact the power of compounding? - Answers-It reduces
the power of compounding the interest given.
What's the main difference between a checking account and savings account? -
Answers-Checking account is made for easy access and spending.
Savings account is made for investments and are made to be particularly inaccessible.
What is NCUA and FDIC? - Answers-NCUA: insures credit union accounts (generally
used for credit union accounts)
FDIC: provides federal insurance for bank accounts (generally used for bank accounts)
How can you maximize your interest? - Answers-Depositing money as soon as possible
in order to maximize your interest.
Tiered Interest - Answers-A tiered interest rate is the amount of interest depending on
the bank account.
How can you avoid a monthly maintenance fee? - Answers-By opening both a checking
and savings account at the same bank, setting up a monthly direct deposit, or choosing
a checking or savings without a monthly fee.
What is the average fee charged by large banks for using an out-of-network ATM? -
Answers-$4.73
What is an excessive transactions fee? - Answers-An excessive transaction fee is a fee
that happens when savings account holders withdraw over the federal limit. (The federal
limit being six free withdrawals and transfers per month.)
What is an overdraft fee? - Answers-An overdraft fee is when you get charged (by
choice) when borrowing the money the bank lends you when you don't have enough
money to make a transaction
How much money are you recommended to save? - Answers-You are recommended to
save 20% of your income.
What categories encompass the portion of your paycheck that is designated for saving?
- Answers-Putting money away in a retirement account
Building an emergency fund
Saving for higher education
