1. Savings Chapter 8

2. Why save?  Save for the Unexpected  Save for Opportunities  Save for Major Purchases  Save for Flexibility  Save to Achieve goals

3. Saving strategies  Pay yourself first  Save by the numbers (%)  Reward yourself  Savings and self-control  Automatic savings  Payroll deductions  Checking account transfer

4. Savings Institutions  Commercial bank  Savings banks  Dividends  Depositor-owned  Savings and loan associations  Mortgages  Credit unions  Members share common bond  Not-for profit

5. Deposit Insurance  FDIC – commercial and savings banks  Saving Association Insurance Fund (SAIF) – S&L  National Credit Union Share Insurance Fund (NCUSIF) – credit union  UP TO $100,000

6. Considering a Savings Account  Insurance – private or governmental?  Interest rates  Minimum balance  Fees and restrictions

7. CD'sMoney market U.S. Treasurey SecuritiesSeries EE bondsSeries HH bonds Minimum length YesNoYes Yes - at least 6 months Initial Deposit$500 or more$1,000 or more$5,000 or more$25-$5,000$500-$10,000 InterestFixedBased on market Fixed InsuredYes Interest Higher than savings Lower than CD'sHigher than CD'sDependsFixed Penalties Yes - Early withdra wl Yes - Transaction, below min. balance, Not for withdrawl No Notes Longer the time, the higher the interest rate Rates vary, banks make short term investments TreasurY bills - less than a year; Treasury notes - 1-10 years; Treasury bonds - more than 10 years Semi-annual interest, pay 1/2 face value, Fed tax paid when cashed, no state or local tax Acquired at face value, only purchased in exchange for other govrnment investments (not cash), no state or local tax, interest sent to account