Banking Unit Study Guide

What is a checking account used for?

Daily transactions such as depositing and withdrawing money, writing checks, paying bills, using a debit card, and accessing money through ATMs.

What feature allows employers to send paychecks directly to your account?

Direct Deposit.

How can you avoid overdraft fees on your checking account?

Keep track of your balance to avoid spending more than you have.

What is the main purpose of a savings account?

To store and grow money over time.

What are the limits on withdrawals in some savings accounts?

Limited Transactions, meaning there are restrictions on the number of withdrawals per month.

What type of savings account usually offers the highest interest?

Certificate of Deposit (CD).

What is an overdraft fee?

A fee charged when spending more than what is in your account.

How can you avoid ATM fees?

Use in-network ATMs or request cash back at stores.

Who are unbanked individuals?

Those who do not have a checking or savings account at a bank or credit union.

What challenges do unbanked individuals face?

They rely on expensive services, their money is not protected by FDIC insurance, and it is harder to build credit history.

What does FDIC Insurance do?

Protects your money in case a bank fails, up to $250,000.

What is mobile deposit?

Allows you to deposit checks through a banking app.

What should you review to prepare for the exam?

The differences between checking and savings accounts, common banking fees, reasons why some people are unbanked, and key banking terms.