Basics of Banking Products and Services

Question 1

Cons:

• low interest rate

Answer 1

(statement) savings account

Question 2

proissory note issued by bank or credit union that pays higher rate of interest than most savings accounts; it is a time deposit that restricts depositors from withdrawing funds on demand without paying a penalty; the term is usually between one month and 5 years

Answer 2

certificate of deposit (CD)

aka Time Deposit

Question 3

What banking product would you choose if….

Do not have a big balance, need immediate access to money, and need a safe place to put money away for future use

Answer 3

(statement) savings account

Question 4

Cons:

• committed to keep money on deposit for a specified amount of time
• pay penalty if withdraw money early

Answer 4

certificate of deposit (cd)

aka time deposit

Question 5

Cons:

• high minimum balance requirement
• high monthly fees if balance requirement is not met
• limited amount of withdraws allowed

Answer 5

money market account

Question 6

a transactional deposit account that allows for withdraws and deposits; highly liquid and money can be withdrawn using checks, ATMs, debit cards, electronic debits, etc

Answer 6

checking account

Question 7

Pros:

• FDIC insured
• safer alternative to pay bills
• can link to Visa/Mastercard
• immediate access to money
• easy to deposit and withdraw funds

Answer 7

checking account

Question 8

type of savings account that offers higher rate of interest in exchange for maintaining higher balance and limited amount of withdraws per month

Answer 8

money market account

Question 9

What banking product would you choose if….

Are looking for convenient and safe way to pay bills and need immediate access to money

Answer 9

checking account

Question 10

Pros:

• FDIC insured
• earn higher rate of interest
• can write checks

Answer 10

money market account

Question 11

What banking product would you choose if….

Looking for higher interest, are too scared to put money in stocks, and don’t need access to the money just yet

Answer 11

certificate of deposit (cd)

aka time deposit

Question 12

Pros:

• FDIC insured
• earn interest
• easty to deposit and withdraw funds
• low minimum balance requirement

Answer 12

(statement) savings account

Question 13

account where yu put money away for future use

Answer 13

(statement) savings account

Question 14

Pros:

• FDIC insured
• higher rate of interest

Answer 14

certificate of deposit (CD)

aka time deposit

Question 15

What banking product would you choose if….

Looking for higher interest rate and too scared to put money in stocks, can keep a high account balance and do not make withdrawals

Answer 15

money market account

Question 16

Cons:

• very little or no interest
• can result in many fees if not managed properly

Answer 16

checking account