Saving and Investing By PresenterMedia.com

Today’s Objectives I can compare and contrast different types of investments, including savings accounts, CDs and savings bonds I can calculate values of the invested money through several investment vehicles. I can explore how to reach a short-term and long-term goal using savings and investment strategies

What are some ways to get more $?

What are some ways to save $?

Interest Most banks pay you for the privilege of having your money, provided you put it in a deposit account. This is known as interest. Fixed interest means the rate of interest is agreed for a period in advance and even if the normal interest rates that most banks are giving goes up or down that interest rate remains the same. Variable interest rates change and can go up or down. © Annie Patton

Why do people save? Because they have too much income. In case of emergencies. For example health problems. For something in the future. For example their children’s education. For an upcoming event. For example holiday or daughter’s wedding. For something that they really need, but cannot afford at the moment and they know to buy the item using credit is too expensive. For their old age, when they can no longer work. © Annie Patton

How quick can you get access to your money? The longer a saver agrees to give their money to the bank the greater the interest. If the money is on demand, meaning the saver can go into the bank and ask for the money any day, the interest rate will be low. © Annie Patton

Pensions When people save for their old age, they are saving for their pension. The government encourages this because, if people have enough money to pay for their expenses in old age the government will not have to help them. The earlier one starts to save for a pension the better, because they will have more money and the pension company will have had the money for longer, hence they have been able to make more money with it. © Annie Patton

Most Popular Saving/Investments Advantages Disadvantages Savings Accounts Usually no minimum amount Lower risk than others Certificates of Deposit (CD) Higher rate than savings account Minimum deposit required (often $500 to 2,500) Savings Bonds (bonds issued by the US government to help pay its expenses) Guaranteed by federal gov’t Minimum purchase of $25 Many years to reach face value Stocks (shares owned in a company) Earn money when price of stock rises Lose money when price of stock drops Mutual Funds (financial organizations that invest the money of its members into a variety of stocks and bonds) Money is diversified so it is protected from individual stock price changes Minimum investments are required and vary from fund to fund.