Questions and Answers
Investing is best for ________.
long-term financial goals, like paying for retirement.
How can you avoid spending more than what is in your bank account? (Select all that apply)
A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily.
False
Which of the following financial institutions typically have the highest fees?
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Which of the following statements about savings accounts is FALSE?
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Savings accounts typically offer more interest than what type of account?
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What should you do before you approach an ATM?
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Your financial institution can't help you if there is a mistake on your bank account statement.
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A stock is ________.
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Which of the following is NOT a common feature of a financial institution?
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Study Notes
Investing
- Investing is primarily suited for long-term financial goals, such as retirement.
- It is not designed for guaranteed fast growth or short-term financial needs like emergency funds.
Managing Bank Accounts
- To prevent overspending, maintain personal records to compare with bank records.
- Checking bank statements monthly is insufficient for avoiding overdrafts.
Interest Rates
- A savings account that compounds interest daily yields higher returns compared to those that pay simple interest.
Financial Institutions and Fees
- Check cashing and payday loan companies typically impose the highest fees, more than internet banks and credit unions.
Savings Accounts
- Savings accounts are not intended for short-term usage as they often limit monthly withdrawals.
- They usually pay interest on deposits, contrary to the misconception that they do not.
Account Types
- Savings accounts generally offer better interest rates than checking accounts.
- Different account types serve various financial purposes, with savings accounts tailored for longer-term savings.
ATM Safety
- Prior to using an ATM, ensure the environment is safe and watch for suspicious individuals.
Financial Mistakes
- A financial institution can assist if there are discrepancies on your bank statement.
Stocks and Investments
- Stocks represent shares of ownership in a company, differing from debt investments such as loans.
Features of Financial Institutions
- Common features include access to paper checks and ATMs, while access to investment products is less common.
Studying That Suits You
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Description
Test your knowledge on banking concepts with these flashcards from the EVERFI Banking Basics program. Learn about investing, spending habits, and how to manage your finances effectively. This quiz will help reinforce your understanding of essential banking principles.
