1. General Business Unit 10 Savings & Investment Strategies Chapter 34 Using Your Savings Plan

2. Text Book  Pg. 466 –Online Auctions  Pg. 467 –Focus on Real Life Read Aloud

3. Regular Savings Acct.  Low or zero minimum balance  High liquidity –Withdraw when want  Pays interest

4. Saving Acct. Register  Record withdrawals & deposit  Add interest earned –See how much money in acct.  Bank statement shows activity –Check acct. register w/statement Reconcile

5. Deposit  Deposit –Fill out slip –Attach money or check(s) In-person, mail (checks only), ATM (automatic teller machine) EFT (electronic funds transfer) –1 account to another

6. Withdrawal Slip  Written request to take money out of account –Checks if money in acct. to cover withdrawal In-person, ATM, EFT

7. Money Market Accts.  Pays variable interest rate –Based on rates paid to short-term gvt. debt – U.S. treasury bills  Reflects interest paid in money markets  Large minimum balance –May limit # of withdrawals  Yield is higher than reg. Savings acct.

8. Certificates of Deposit  Long-term deposit –Early w/d = loss of interest &/or penalty  Pays higher interest  Minimum deposit

9. Certificates of Deposit  Certificate indicates: –Amount deposited –Interest rate –Withdrawal date –Penalties for early withdrawal

10. Computer Time  Compare –Fixed CD, Savings Accounts, Checking Accounts –rates and terms from 2 different banks –Wachovia, Commerce, Fidelity, Citizens, Bank of America etc.  Which offers the best overall plan today?

11. IRA  Individual Retirement Account (IRA) –Tax-sheltered retirement plan –Invest up to $2,000 annually –Defers tax until retire OR –Pay tax up front & no future tax on gains owed –Tax deductible Up to certain income level

12. Roth IRA  Created in 1997 –Income limits $95,000 individuals or $150,000 for filers of joint returns –Adjusted up each year for inflation –Contributions not deductible No taxes on future gains Grows tax free indefinitely

13. IRA  Retirement plan –Withdrawal prior to 59.5 years old Penalty is 10% on w/d plus Income tax paid on tax-deferred funds

14. The End Chapter 34