Notes
Accounts
- Checking is for everyday spending; savings is for money you set aside and earns interest (shown as APY). FDIC (banks) and NCUA (credit unions) insurance protects deposits up to a limit.
- A debit card spends money directly from your checking account; it is not borrowing.
Safe banking
- Use strong unique passwords and two-factor authentication. Never share your PIN or one-time codes. Review your account regularly.
Fees and overdrafts
- Compare monthly fees, ATM fees and minimum balances. Yearly cost of a monthly fee $= \text{fee} \times 12$.
- An overdraft occurs when you spend more than you have. Avoid with alerts, tracking, a cushion or overdraft protection linked to savings.
Reconciling
- Adjusted balance $=$ statement balance $+$ deposits in transit $-$ outstanding checks.
Topics in this unit
Each topic has its own short notes and practice.
Practice
Savings accounts earn interest and are meant for saving.
$4000 \times 0.03 = 120$.
$7 \times 12 = 84$.
$60 - 75 = -15$, then $-15 - 25 = -40$.
Real banks do not ask for your password by text, and the link may be a scam.
$900 + 150 - 250 = 800$.
Free response
Write your answer first, then open the scoring guide.
Free-response question
Priya has a checking account with a $6 monthly fee. The fee is waived if she keeps a minimum balance of $500. Her balance is $420 and she plans a $50 debit purchase. The bank charges a $30 fee for each overdraft.
(a) How much does the monthly fee cost per year if she never meets the minimum?
Show the answer and scoring guide
$6 \times 12 = 72$, so $72 per year.
Check off the points you earned:
(b) What is her balance after the $50 purchase, and does it cause an overdraft?
Show the answer and scoring guide
$420 - 50 = 370$. The balance stays positive, so there is no overdraft and no $30 fee.
Check off the points you earned:
(c) Suppose instead her balance was $20 and the same $50 purchase was allowed through. Find the new balance and name one way to avoid this.
Show the answer and scoring guide
$20 - 50 = -30$, then $-30 - 30 = -60$, so the balance is -$60. She could track her balance, set low-balance alerts or link savings as overdraft protection.
Check off the points you earned: