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Savings Options, Features, & Plans PowerPoint Presentation
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Savings Options, Features, & Plans

Savings Options, Features, & Plans

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Savings Options, Features, & Plans

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  1. Savings Options, Features, & Plans Chapter 10: Part 2 By Scott Feil 12/15/2005

  2. Overview • Savings Options • Selecting a Savings Plan • Saving Regularly

  3. Savings Options • Regular Savings Account • High “Liquidity” • You can turn it into cash easily and quickly with no (or little) loss of value • You can withdraw and deposit at any time • Lower Interest • Usually the lowest of all savings options • (Except stuffing it in a mattress)

  4. Savings Options, cont. • Certificate of Deposit (CD) • Deposit money for a fixed length of time • Must be at least a certain amount • If you take it out early you will pay a penalty • At a fixed interest rate • Usually higher interest since it is less liquid • Maturity Date • The date on which the investment becomes due for payment

  5. Savings Options, cont. • Money Market Account • Combination savings/investment plan • Highly liquid, money can be withdrawn any time • Usually not insured • Interest rate changes depending on the market • Usually higher rate than savings account • Usually requires a higher minimum balance

  6. Selecting a Savings Plan • Liquidity • How quickly can you turn it into cash? • Safety • Is it insured, for how much? • Convenience • Do you want to go to multiple banks for different services/accounts? • Interest-Earning Potential (Yield) • How much will you earn from this account? • Fees and Restrictions • Minimum balance? Service/ATM charges? Other fees?

  7. Saving Regularly • Will you save every day/week/month? • If you don’t actually put the money in… • Direct Deposit • You can have all or part of your check put directly into your savings • Automatic Payroll Deductions • Witholding a certain amount of each check automatically • Payroll Savings Plan/Payroll Investment Plan