1. Savings Options, Features, & Plans
Chapter 10: Part 2
By Scott Feil
12/15/2005

2. Overview
Savings Options
Selecting a Savings Plan
Saving Regularly

3. Savings Options Regular Savings Account High “Liquidity”
You can turn it into cash easily and quickly with no (or little) loss of value
You can withdraw and deposit at any time
Lower Interest
Usually the lowest of all savings options
(Except stuffing it in a mattress)

4. Savings Options, cont. Certificate of Deposit (CD)
Deposit money for a fixed length of time
Must be at least a certain amount
If you take it out early you will pay a penalty
At a fixed interest rate
Usually higher interest since it is less liquid
Maturity Date
The date on which the investment becomes due for payment

5. Savings Options, cont. Money Market Account
Combination savings/investment plan
Highly liquid, money can be withdrawn any time
Usually not insured
Interest rate changes depending on the market
Usually higher rate than savings account
Usually requires a higher minimum balance

6. Selecting a Savings Plan
Liquidity
How quickly can you turn it into cash?
Safety
Is it insured, for how much?
Convenience
Do you want to go to multiple banks for different services/accounts?
Interest-Earning Potential (Yield)
How much will you earn from this account?
Fees and Restrictions
Minimum balance? Service/ATM charges? Other fees?

7. Saving Regularly Will you save every day/week/month? Direct Deposit
If you don’t actually put the money in…
Direct Deposit
You can have all or part of your check put directly into your savings
Automatic Payroll Deductions
Witholding a certain amount of each check automatically
Payroll Savings Plan/Payroll Investment Plan