1. Understand the various choices available for storing money
Topic 5

2. Learning Intentions
Understand the reasons for storing money in a certain way.
Compare the different ways of storing money for Short-term savings and Long-term investments
Outline the reasons for choosing to store money in a particular way

3. Ways of Storing Money Under the Bed or Mattress Hidden in a Box
House safe
Wallet or Purse
Bank or Building Society
Post Office, NS&I (National Savings and Investments)
Stocks and shares
Property

4. Savings Products Choosing the right one
You want an account that gives you access to your money when you want it –ATM, online etc.
If you are saving higher amounts of money you want to look for something with a high interest rate
Length of Notice required to get your money
Ethical Saving - the Cooperative Bank
Culture and Religion – Muslims cannot have accounts that pay interest
Other incentives

5. Which Savings Product Before deciding you have to think about:
The amount that you can save
The length of time you want to save
How important is it to have easy access to your money
The risks you are willing to take

6. Longer-term Investments
If you are planning on saving for a long time (years rather than months) or if you have a large amount of money to put away for a long period of time you may consider:
Shares
Property – rental income
Pension – 40 years

7. Choosing a provider Go online
Visit different banks and building societies
See what types of accounts they offer
What Interest Rates are available
Conditions i.e. amounts you may have to pay in
Time scales of saving accounts ie notice period

8. Choosing a Bank or Building societies
Location of your nearest branch
Isa’s (interest Tax Free)
Banking services
Packaged current accounts
Mortgage rates
Online banking

9. The Post Office
Found in most areas – convenient and open for longer hours than a bank
Provides a range of savings accounts
NS&I products - National Savings and Investments one of the largest and best known organisations in the UK. The money saved is loaned to the government to help pay for public services that are not fully financed by our taxes (safe place for your money)

10. Supermarkets – Opening Accounts
Done via the internet, phone or post (Tesco Bank)
Leaflets found at the tills and areas where you have to pay for your goods

11. Credit Unions Many of these organisations are based locally
You have to be able to qualify to be able to use one i.e. through your work, area, trade union (common bond)
They encourage members all to save regardless of the amount
Not everyone wishes to have a bank account

12. Saving Stamps, Savings Clubs, Christmas Clubs
Can save a little each month to pay for a big shopping spree ie Christmas
They allow you to save between £20-£500
Organisations can go bust (ie Farepak)
no interest paid on what you have saved
Christmas clubs are done through supermarkets, butcher shops etc. You are restricted on where you can spend the money you have saved with them

13. Today ……….. Read through the Topic 5 notes (Pages 89 to 96)
Answer Review Questions on Page 97
Complete the Learning Activities on Page 98

14. Sites to visit www.dailymail.co.uk/money/index.html

15. Topic 6 – Understand and work out the true cost of spending
What do you think this means
‘value for money?’
Discounts
Special Offers
Designer labels
BOGOF’s
Taxes – VAT
Hidden Charges (postage, handling fees)
Is it worth the money?

16. Value for Money
You feel that you have paid a fair price for what you have bought
The cheapest is not always the best deal or value for money – Why?

17. What is meant by shopping around?
Internet
Research
Pounding the pavements
Looking at catalogues

18. Shop Discounts Students Staff Cards Accounts Coupons Bulk buying
Loyalty Cards
Free gifts (catalogues)

19. Labels
Armani
Rolex
Apple Mac
Thornton’s Easter Egg
Cristal Champagne

20. Opportunity Costs – give up something to get something
Going for a meal
Going for a drink
Going to the theatre and the cinema

21. Taxes on what we spend- VAT
Standard rate 20%
Reduced rate 5% - gas electricity, domestic fuel
Zero Rate – food, childrens clothes, childrens shoes, books, newspapers and magazines

22. Duties –government tax
Cigarettes
Alcohol
Petrol

23. Insurance premium tax (IPT – Government Tax)
Home, cat, pet, holiday
Covers theft, fire, illness, lost luggage etc.

24. Hidden Charges Postage and package Import duty (Customs Charges)
Booking fees
Service charges
Online shopping charges

25. Topic 7 – Money to Make Money
Shares
Premium Bonds – – ERNIE Electronic random number indicator equipment
win with Premium Bonds
UK Lottery – six numbers run by Camelot – money raised for good causes and some given to the government –
1-13,983,816 to win on the lottery jackpot
1-54 can win something – –lottery.co.uk

26. Gambling Addictive You need to have a ‘stake’ of some kind
Winning unlikely
Risky
Not reliable
Large losses

27. Other investments – www.bbc.co.uk – go to Business pages
Gold
Antiques
Paintings
Prints
Stamps
Precious stones
Jewellery
Silver
Coins
Good and bad points of each – what can happen investing in the above?

28. Using Money Abroad – Foreign Money Calculations
Currency what is it? Unit of money you use in different countries
The Euro – used by 16 of the 27 countries in the European Union – Collectively known as the eurozone – the euro is the legal tender of the eurozone
Micro states – Andorra, Monaco, San Marino, The Vatican City

29. Exchanging money
You need an exchange rate to buy and sell – popular currencies have high exchange rates (good for the country you are visiting)
Areas that are not so popular to visit have heavier charges
To Calculate : Exchange rate and the amount in Sterling
Look at the calculations on page 132 to convert back you have to divide see page 133 – 135
What is commission?

30. Paying abroad Notes Coin
Travellers cheques – in Sterling, US Dollars, Euros, Canadian Dollars
Plastic cards
Travellers Cheques Safer – Expensive to get and cash

31. Exchanging abroad Banks Bureau de change Hotels Shops
You risk losing money when converting back to sterling

32. Using Plastic – Debit Card
You can use at ATM’s
Shops and Hotels
Look for Cirrus, MasterCard or Visa

33. Using Plastic – Credit Card
Currency Converted as you need it – to sterling
You will see what comes off in your next statement