Banking

Question 1

50-20-30 Rule

Answer 1

A popular savings rule of thumb in which 50% of your income goes towards necessities, 20% goes towards saving and debt repayment, and 30% goes towards flexible spending

Question 2

ATM

Answer 2

Automatic Teller Machine. Allows a person to manage a bank account holder’s funds through actions such as withdrawing or depositing money, viewing account balances, etc.

Question 3

Balance

Answer 3

The amount of money you have in your bank account

Question 4

Bank Statement

Answer 4

A monthly document prepared by your financial institution which shows all of the transactions related to your account

Question 5

Certificate of Deposit (CD)

Answer 5

A bank product that earns interest on a lump-sum deposit that’s untouched for a predetermined period of time

Question 6

Check

Answer 6

A written, dated, and signed order to the bank that tells it to pay a definite sum of money to a payee

Question 7

Check Cashing Store

Answer 7

A business that cashes checks and gives the customer cash in exchange for a fee for the service

Question 8

Compound Interest

Answer 8

Reinvesting earned interest back into the principal, so that interest is calculated on both the initial amount and the accumulated interest

Question 9

Credit

Answer 9

A sum of money deposited INTO an account

Question 10

Credit Card

Answer 10

A card that allows the holder to make purchases without cash by borrowing money

Question 11

Debit

Answer 11

A sum of money deducted FROM your account

Question 12

Debit Card

Answer 12

A card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash or writing a check

Question 13

Deposit

Answer 13

Money you put into your account

Question 14

Direct Deposit

Answer 14

An automatic electronic deposit of net pay to an employee’s designated bank account

Question 15

Emergency Fund

Answer 15

Money set aside for unanticipated expenses or loss of income

Question 16

Endorse

Answer 16

To sign the back of a check made out to you so it can be cashed or deposited

Question 17

FDIC Insurance

Answer 17

Protection provided by the Federal Deposit Insurance Corporation; protects the deposits of customers against loss up to $250,000 per account

Question 18

Federal Deposit Insurance Corporation (FDIC)

Answer 18

The government agency that insures customer deposits if a bank fails up to $250,000 per individual depositor

Question 19

Health Savings Account (HSA)

Answer 19

An account in which you can save pre-tax dollars to pay for out-of-pocket health care expenses

Question 20

Inflation

Answer 20

The rate at which the price of goods increases and consumer purchasing power decreases over time

Question 21

Interest

Answer 21

A fee paid to you for keeping your money in an account OR a fee charged to you for a loan or credit card

Question 22

Impulse Buying

Answer 22

The buying of goods without planning to do so in advance, as a result of a sudden whim or urge

Question 23

Low Balance Alert

Answer 23

A notification that lets you know if the balance in your checking account goes below a set amount

Question 24

Maintenance Fee

Answer 24

A monthly fee that some banks charge to provide access to checking or savings accounts

Question 25

Minimum Balance

Answer 25

A certain amount of money that must be kept in an account as required by that particular financial institution

Question 26

Mobile Deposit

Answer 26

A mobile banking tool that allows you to deposit checks to your bank account using your mobile device

Question 27

Money Market Savings Account

Answer 27

A type of savings account that may allow debit card and check writing privileges

Question 28

Money Order

Answer 28

A certificate that allows the stated payee to receive cash on-demand, usually issued by governments and banking institutions

Question 29

National Credit Union Administration (NCUA)

Answer 29

The U.S. administration insuring deposits in U.S.credit unions against credit union failure up to $250,000 per individual depositor

Question 30

Online Bill Pay

Answer 30

A consumer banking technology that allows you to schedule and make payments over the internet

Question 31

Online Savings Account

Answer 31

A type of savings account, typically offering higher interest rates, that is managed entirely online with no physical bank branch

Question 32

Overdraft Fee

Answer 32

A fee charged to your account when it lacks the funds to cover a withdrawal, but the bank allows the transaction to go through anyway

Question 33

Overdraft Coverage

Answer 33

A loan banks offer to their customers when they try to withdraw more funds than they have in their account, usually for a fee and with interest

Question 34

Pay Yourself First

Answer 34

A method of saving whereby you put a fixed amount of income into a savings account before you pay monthly bills or make purchases

Question 35

Person-to-Person Payment

Answer 35

A digital payment method that allows you to transfer funds from your bank account to that of another person

Question 36

Prepaid Debit Card

Answer 36

A card that is loaded with a specific cash amount before you use it. It is not linked to a bank or credit union account.

Question 37

Principal

Answer 37

Original amount of money saved or invested, separate from interest or earnings

Question 38

Purchasing Power

Answer 38

The number of goods and services that money can buy. It can weaken in time due to inflation.

Question 39

Roth IRA

Answer 39

An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year