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Saving for the Future

Saving for the Future. Types of Savings Accounts. Passbook Savings Account. Minimum balance required to open Withdraw/deposit at anytime ATM/debit Pays lowest interest rate. Money Market Account. Minimum balance required Limited number of withdrawals/deposits per year

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Saving for the Future

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  1. Saving for the Future

  2. Types of Savings Accounts

  3. Passbook Savings Account • Minimum balance required to open • Withdraw/deposit at anytime • ATM/debit • Pays lowest interest rate

  4. Money Market Account • Minimum balance required • Limited number of withdrawals/deposits per year • Slightly higher interest rate than a passbook account

  5. Certificate of Deposit (CD) • Large minimum balance required to open • Time based – lock in money for a certain period of time • Pays the highest interest rate of any savings account • Penalty for early withdrawal

  6. Which One? • Depends on your financial goals • How much interest you want to earn • How you plan to use the money • How much money you have at the time of opening the account

  7. Saving for the Future Review Quiz

  8. 1. Saving is • (a) putting money aside for future use. • (b) investing your money.

  9. 2. When a person saves money, he/she is creating spending__________ • (a) power. • (b) security.

  10. 3. Money in a savings account earns • (a) dividends. • (b) interest.

  11. 4. Dividing 72 by the interest rate is known as • (a) Rule of 72. • (b) doubling by 72.

  12. 5. The Rule of 72 tells us how long it takes money to • (a) triple. • (b) double.

  13. 6. Liquidity is • (a) the ability to move money from one account to another. • (b) the ability to quickly withdraw money and turn it into cash.

  14. 7. Banks pay interest because • (a) they are using your money to loan to others. • (b) they make money by paying you.

  15. 8. Stock is • (a) a portion of profits paid to shareholders. • (b) an investment and ownership in a company.

  16. 9. A mutual fund is • (a) a stock listed on the NYSE. • (b) an investment in a collection of stocks.

  17. 10. Stocks are • (a) more risky than savings. • (b) less risky than savings.

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