1. Common Savings Accounts

2. Types • Regular Savings Account • Money Market Account • Certificate of Deposit (CD’s) Those are listed in terms of liquidity. Liquidity is ability to turn investments into cash. Savings accounts are easiest to turn into cash while CD’s are the hardest.

3. Regular Savings Accounts(Passbook Savings Account) • Frequent deposit and withdrawals • Low minimum balance • Direct Deposit • Low interest paid (0.1%-3%) • Penalty fee charged if account is negative

4. Certificate of Deposit (CD’s) • Money is left on deposit for a stated period of time to earn a specific rate of return • Must leave your money on deposit for one month to five or more years • Banks require a minimum amount to deposit • Pay a penalty if you take the money out early • Interest is from 2% to 6% • Example

5. CD Investment Strategies • Search around for the best rate, banks interest rates on CD’s can vary over 1% • Consider the economy when you decide a time period • Never let the bank roll over the CD, make the decision yourself • Consider when you will need the money

6. Money Market Account • Similar to a regular savings account but offers higher interest • It is a savings account that requires a minimum balance and earns interest that varies from month the month • Banks use the money in money market accounts to make their own short-term investments • Because of this interest rates on money market accounts vary

7. Money Market Account • Requires minimum deposit and minimum balance kept • If minimum balance is not met you may not get any interest at all • You receive the ability to write checks • Can only write a small amount each month (around 2-3 usually) • Can only deposit/withdrawal a couple times a month