BUSCR Personal Finance - Types of Savings Accounts

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Types of Savings Accounts

Section A –Growing Savings Through Interest

Answer the following questions based on the learning module.

1) The greater the interest or rate of return — the more risk you are taking with your money.

True

False

Incorrect

2) Determine the impact each decision would have on your savings.

Which of the following would be more likely to increase the amount you end up with?

(select two answers)

A) choose an account with a higher interest rate
B) save money in your piggy bank
C) wait 15 years to start saving
D) take calculated risks with your savings

Incorrect

3) Which of the following is high risk?

A) Stocks

B) Savings accounts

C) Bonds

Incorrect

4) Which of the following is a medium risk?

A) Stocks

B) Savings account

C) Bonds

Incorrect

5) Which of the following is low risk?

A) Bonds

B) Stocks

C) Savings account

Correct!

6) Look at the savings strategies below and decide if a wise saver would do it, avoid it, or think it doesn’t matter.

Open a savings account at a bank or credit union

A) does not matter

B) avoid it

C) do it

Incorrect

7) Look at the savings strategies below and decide if a wise saver would do it, avoid it, or think it doesn’t matter.

Research saving and investing options before deciding

A) avoid it

B) do it

C) does not matter

Incorrect

8) Thomas deposited $1,000 into a savings account that pays 2% interest per year. At the end of the first year, he’s earned $20 in interest, and there is $1,020 in the account. If the account has ______ interest, there will be $1,040 in it at the end of year two.

A) simple

B) compound

Incorrect

9) _______________interest means you earn interest on both the amount you deposited (the principal) plus what you have earned in interest during previous periods.

A) simple

B) compound

Incorrect

10) Did you score over a 50 in the learning module?

A) Yes

B) No

Correct!

11) According to the video on Compound Interest, Why do people keep money in banks, savings and loans, and credit unions?

A) Deposits at these institutions are risky

B) Deposits at these institutions are safe and earn interest

Correct!

12) According to the video on Compound Interest, What is a good way to increase your wealth through savings?

A) start saving early

B) start saving late

Correct!

Section B – Choosing a Savings Method

Answer the following questions based on the learning module.

13) You see signs for the FDIC at your bank and ask the manager about them. She assures you that your savings of $800 will be “FDIC insured.” If your bank were to fail or go out of business, what would happen to your money?

A) You would get the full value of your account.

B) You lose the money in your account because it is less than $250,000.

C) Your account will be closed by the FDIC.

D) You can access half the value of your account.

Correct!

14) Which of the following is a disadvantage of a certificate of deposit?

A) Only available at a few financial institutions

B) No insurance on these accounts from the federal government

C) Pays a lower interest rate than traditional savings accounts

D) Usually pay a penalty if you withdraw the money early

Correct!

15) Which of the following two are examples of saving methods?

A) Checking Account
B) Certificate of Deposit
C) Bonds
D) Money Market Account
E) Stocks

Correct!

16) To compare the interest you can expect to earn on your savings, be sure to find out the ______ you will get.

A) FDIC

B) APY

Correct!

17) The Federal Reserve influences the interest rates that savers earn and borrowers pay.

True

False

Correct!

18) Which of the following are things you should do before opening a savings account? Select ALL that apply.

A) Count your spare change.
B) Know the interest rate.
C) Compare your choices.
D) Consider more than one account.
E) Save at least $500.

Incorrect

19) Did you score over a 50 in the learning module?: Choosing a Saving Method

A) Yes

B) No

Correct!

20) After watching the video on Interest, If your bank offers 6 percent annual simple interest, and you start with $60 in your account, how much will you have after one year?

A) $66.30

B) $66.00

C) $63.60

D) $70.00

Excluded

21) After watching the video on Interest, How can you compare simple and compound interest?

A) Compound interest is paid on the principal plus accrued interest; simple interest is paid only on the principal

B) Simple interest is paid on the principal plus accrued interest; compound interest is paid only on the principal

C) Compound interest is paid out once a month; simple interest is paid out once a year

D) Simple interest is more difficult to calculate than compound interest

Excluded

22) Please attach any work required by your teacher and complete the log entry.

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