When comparing savings accounts, which number reflects what you actually earn in a year, including compounding?

The APY (Annual Percentage Yield).

You spend more than what's in your checking account and the bank covers it. What is this, and what usually follows?

An overdraft, which usually comes with an overdraft fee.

Financial Literacy Quiz: Test Your Banking Knowledge

Answer all 12 multiple-choice questions, then press "Check My Answers." Nothing is saved and there's no sign-up — it's just practice. Every answer comes with a short explanation so you can learn as you go.

Question 1 Which type of bank account is designed for everyday spending — paying bills, using a debit card, and frequent transactions?

A savings account A checking account A certificate of deposit An emergency fund

Question 2 What is compound interest?

Interest paid only on your original deposit A one-time bonus from the bank Interest earned on both your original money and the interest it has already earned A fee charged for using an ATM

Question 3 When comparing two savings accounts, which number reflects how much you'll actually earn in a year, including compounding?

APR APY PIN NSF

Question 4 You spend more than what's in your checking account and the bank covers it anyway. What is this — and what usually follows?

A deposit; you earn interest An overdraft; you're charged an overdraft fee A wire transfer; it's instant and free A direct deposit; your employer pays you

Question 5 A common rule of thumb says an emergency fund should cover about how much?

One day of expenses Three to six months of living expenses Ten years of income Exactly $100

Question 6 Which habit actually helps you build a credit history?

Using a debit card for everything Keeping all your cash at home Using a credit card and paying it off responsibly Avoiding banks entirely

Question 7 What does FDIC insurance protect?

Your phone if you drop it Your deposits at an insured bank, up to the legal limit, if the bank fails The stock market from crashing Your credit score

Question 8 In the popular 50/30/20 budgeting rule, what is the 20% meant for?

Rent and groceries Entertainment and dining out Savings and paying down debt Taxes only

Question 9 What is direct deposit?

Depositing cash at an ATM Your paycheck being sent electronically straight into your bank account Mailing a paper check to your landlord Withdrawing money at a branch

Question 10 If you only ever pay the minimum payment on a credit card balance, what happens?

The balance disappears after one month You pay far more in interest and take much longer to pay it off Your interest rate drops to 0% The bank forgives the debt

Question 11 Same interest rate, same deposit, left untouched for 20 years — which earns more?

Simple interest Compound interest They are always identical Neither earns anything

Question 12 An NSF ("non-sufficient funds") result means what?

The bank covered your purchase for a fee Your transaction was declined because you didn't have enough money You earned a bonus Your account was upgraded

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