Savings Options
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Transcript of Savings Options
![Page 1: Savings Options](https://reader036.fdocuments.us/reader036/viewer/2022082611/56812acd550346895d8ea988/html5/thumbnails/1.jpg)
Savings Options
![Page 2: Savings Options](https://reader036.fdocuments.us/reader036/viewer/2022082611/56812acd550346895d8ea988/html5/thumbnails/2.jpg)
AssignmentGo to the 3 ring binder and find the savings
options organizer. Fill this organizer in as you view this
PowerPoint.
![Page 3: Savings Options](https://reader036.fdocuments.us/reader036/viewer/2022082611/56812acd550346895d8ea988/html5/thumbnails/3.jpg)
Savings AccountExamples: Passbook SavingsInterest:
Lower interest rate than other saving options
Interest rates sometimes higher when your balance is higher
Withdrawal RulesRegulation D: Make 6 withdrawals within a
statement cycleAdvantages
Safe, small opening deposit, earn interest
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Certificate of Deposit (CD)CD: deposit that earns a fixed interest rate for
a fixed period of time.Interest:
Higher interest rates because the bank knows how long you will keep the $ on deposit…so they can offer you higher rates than a savings account.
Generally the longer the period of time you invest your money the higher your interest rate (or rate of return) will be.
Withdrawal Rules:Pay % of interest designated by the bank for early
withdrawal.
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Certificate of DepositAdvantages
Higher interest rates than a passbook savings
DisadvantagesYour $ is locked up for a specific time periodIf interest rates on another option is higher
then you can’t take advantage of those higher rates without paying a penalty.
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Money MarketCombination of a savings and a checking accountInterest:
Higher interest than regular savings but lower than CDs
Different rates for different balancesWithdrawal Rules:
Regulation D…but 3 of your withdrawals can be checks
Advantages:Higher interest rate than a passbook savingsUnlimited transfers electronically
Disadvantages:Amount of times you can withdraw your $
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Government BondUS Government owes you the amount of
the bond plus interestInterest:
Call treasury department for redemption table or go to your local bank.
Withdrawal Rules:Can sell your bond at any time without
penalty; you just wouldn’t earn the full amount of interest until the bond matures
AdvantagesSafe way to invest your $
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Annual Percentage Yield (APY)Interest the account will earn in 1 yearHelps compare rates at different banks