SAVE WITH SAFETY STANDARD Chapter 8, 8.3

Certificates of Deposit (CD)  type of savings account  pays fixed rate  minimum deposit  length of time varies  insured up to 250K  incur penalties for early withdrawal

Money Market Account  variable rate  higher deposit required  no penalty for withdrawal  not always insured

Understanding APY Annual Percentage Yield is the required method of disclosure of percentage rates on accounts

Government Bonds  for specified term  how government borrows money  guaranteed to be paid

Treasury Securities  Sold in multiples of $100  have higher rate than CD  bills have term less than 1 year  notes have term 2/5/10  bond have term of 30 years

Savings Bonds  purchase through most financial institutions  denominations of $50 to $10,000  EE Bonds sold at half face value, must keep for 1 yr minimum  I Bonds new rate set every 6 months (to match inflation), ensures interest earned will always be higher than rate of inflation

Advantages of Government Bonds  interest is tax free until cashed  may be entirely tax free if used for higher education  safe investment