The Ultimate Savings Account Quiz

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By: Staff

5 Min Quiz

Image: refer to hsw

About This Quiz

A savings account is a safe place to stash your cash. While keeping your money safe from theft or fire, the bank or credit union will pay you interest on your account balance. Knowing about savings accounts can help you to manage your nest egg.

Why is a savings account a safe place to stash your money?

Depositing your money in a savings account will keep your cash safe from theft or fire. Also, banks and credit unions guarantee your savings account for up to specified balances.

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What does the bank pay you?

The bank will pay you interest. For little or no charge, the bank will hold your money and pay you interest on the balance.

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When does the bank pay interest?

Usually the interest is paid every month.

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What is compounded daily interest?

With compounded daily interest, interest is earned every day. The daily earned interest is added to the principal and this becomes the new principal balance. Compounded daily interest pays interest on the principal and interest on the interest.

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What do banks and credit unions do with your account deposits?

They use the savings account deposit to bankroll loans to others. Don't worry, your money is available for you anytime.

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What is a money market savings account?

A money market is a type of savings account and may pay more interest than a regular savings account. Money markets may require a more substantial minimum balance and have other stipulations.

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Do money markets have any fees?

Account costs and fees may vary, so shop around for an account with charges suitable for you.

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How can you track your deposits, withdrawal fees and interest payments?

A monthly savings account statement will be provided. Most accounts have Internet access and then you may monitor you account as often as you wish.

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What is account reconciliation?

Matching your records with the bank statement is called reconciliation. Bank errors are very rare so if your account does not reconcile you should check your accounting.

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How do you receive the monthly bank statement?

Statements are issued by regular mail. If you have selected Internet access, the statement will be available online.

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What if you don't want a written statement mailed to your address?

You may elect to stop paper statements and receive your statements online.

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What is a passbook savings account?

A passbook savings account is a basic bank savings account. A passbook account usually has a low or no minimum balance and pays a low interest rate.

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What type of business is a credit union?

A credit union is a cooperative organization formed by and for specific groups of people.

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What type of business is a bank?

A bank is a commercial business and the goal of a bank is to make a profit from bank operations.

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Why would you rather get a loan from a credit union than a bank?

A credit union may have a lower interest rate loan available.

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How does a bank make money from savings accounts?

The bank pays you money on your account balance and then loans the money out at a higher interest rate.

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How do account interest rates differ at banks and credit unions?

Usually the credit union's interest rates are lower than the banks, you should shop around for the best rate.

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What kind of groups have credit unions?

Many state employees have credit unions are available.

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For savings accounts, are the bank fees expensive?

The bank fees are usually very low ,but you should know what fees will be charged before you open an account.

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When you open a savings account, how much money do you need for the initial deposit?

Usually the minimum deposit is low or none at all.

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