Personal Finance SECTION 5.2. Types of Savings Plans  Regular Savings Accounts  Certificates of Deposit  Money Market Accounts  U.S. Savings Bonds.

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Presentation transcript:

Personal Finance SECTION 5.2

Types of Savings Plans  Regular Savings Accounts  Certificates of Deposit  Money Market Accounts  U.S. Savings Bonds

Regular Savings Accounts

Certificate of Deposit (CD)  Savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return.  The period of time is called the term.  The date when the money becomes available to you is called the maturity date.  Low risk way to invest your money.

CD Trade Offs  To get higher interest rate you must

CD Investment Strategies  Find out where you can get the best rate  Considering the economy as you decide maturity date  You may want to buy a long-term CD if interest rates are relatively high

Money Market Accounts  Savings account that requires a minimum balance and ears interest that varies from month to month.

U.S. Savings Bonds  Are debt securities issued by the US Department of Treasury to help pay for the U.S. Government’s borrowing needs.

Evaluating Savings Plans  Rate of return  Compounding

Evaluating Savings Plans  Annual Percentage Yield

Evaluating Savings Plans  Inflation

Evaluating Savings Plans  Tax Considerations  Liquidity

Evaluation Savings Plans  Restrictions and Fees

Types of Checking Accounts  Regular Checking Account  Activity Accounts  Interest Earning Checking Accounts

Evaluating Checking Accounts  Restrictions  Fees and charges  Interest  Special Services