In this version of our financial literacy test, we focus on savings, banks and the interest earned from saving accounts. Test your knowledge, learn something new and pat yourself on the back for answering these correctly.
a. Simple interest is only calculated on the principal amount of a deposit, while compound interest is based on the deposit’s principal amount and any additional interest earned from previous periods accumulated in the account.
b. Simple interest is based on the deposit’s principal amount and any additional interest earned from previous periods, while compound interest is only calculated on the principal amount of a deposit.
c. There is no difference.
a. More than $1,000
b. Exactly $1,000
c. Less than $1,000
b. Re-characterization of the account (converting your savings account into a checking account, for example)
c. Closing of the account
d. All the above
a. Zero coupon CD
b. No-penalty CD
c. High-yield CD
a. 12-month certificate of deposit
b. High-yield savings account
c. 7-month no-penalty CD
a. A CD that gives you a higher APY each time your account reaches a certain dollar amount
b. A collection of your favorite CDs from the 90s
c. A savings strategy where you spread a lump sum of money across multiple CDs with different maturity dates
This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.