NAB Financial Products and Services

Question 1

What is the primary difference between a savings account and a checking account?

Accepted Answer

Savings accounts earn interest for deposited funds; checking accounts are designed for frequent transactions

Answer

There is no difference

Answer

Savings accounts do not earn interest

Answer

Checking accounts have higher interest rates

Question 2

What is a certificate of deposit (CD)?

Accepted Answer

A time deposit that earns a fixed interest rate for a specified term

Answer

A stock certificate

Answer

A business registration document

Answer

A credit card type

Question 3

What is compound interest?

Accepted Answer

Interest calculated on both the initial principal and accumulated interest from previous periods

Answer

Interest calculated only on the original deposit

Answer

A penalty for early withdrawal

Answer

A fee charged by banks

Question 4

What is a money market account?

Accepted Answer

A deposit account offering higher interest rates than regular savings with some checking features

Answer

A stock trading account

Answer

A foreign currency exchange account

Answer

A business loan account

Question 5

What does APY stand for in banking?

Accepted Answer

Annual Percentage Yield — the total interest earned on a deposit over one year including compounding

Answer

Annual Payment Year

Answer

Automatic Payment Yield

Answer

Average Percentage Yearly

Question 6

What is the FDIC and what does it do?

Accepted Answer

The Federal Deposit Insurance Corporation insures bank deposits up to $250,000 per depositor

Answer

A type of bank account

Answer

A credit rating agency

Answer

A stock exchange