BANKING AND SAVING QUIZ

why are banks important?

banks bring savers and borrowers together, if banks didn’t exist, we wouldn’t have anywhere to save or deposit our money and they wouldn’t be able to lend out. Not just to individuals but to businesses as well. 

what are the three types of bank accounts

CD, traditional savings accounts, traditional money market accounts

• they all allow you to save money, and it’s a low risk way to save. they all earn interest they have an APY (annual percentage yield), They’re all covered by FDIC 

FDIC insured definition

FDIC insured means: if you deposit your money into that bank that is FDIC insured and if the bank fails, the government will get 250,000 back. 

what’s the difference between savings and checking account

checking accounts are used for daily transactions and there’s no limit to withdrawing. while savings accounts it’s a way for you to save your money with a low risk and a little bit of interest, they limit you to 6 times a month regarding withdrawing

why is a cd beneficial

they have higher interest rates, they’re more secure than savings/money market accounts, you lock your money away for a period of time. But, if youre locked in so you can’t take it out unless you want to pay a interest back or a penalty fee

what are money market accounts

there's more limitation with withdrawing from money market accounts than savings, they come with a debit card, they have a higher APY and they might have a minimum deposit/balance requirement and check writing 

what is an overdraft fee

you can opt out of an overdraft fee but when you use your card, it’ll decline. You can make sure you’re checking your account and also you can put a low balance alert.

what is an APY

the total amount of interest you’ll earn in a year

what is a routing number

the bank’s address