Savings Accounts
Unexpected expenses
Opportunities
Major Purchases
Flexibility
Achieve Long Term Goals
Save First
Just like paying a bill put money from your checkingaccount into a savings account.
Same amount each pay period or a certain percent
Automatic Payment to Savings
Like direct deposit a portion of your paycheck goesstraight into savings
Custodial Savings – Savings account for aminor
Can have savings account until child is 18 years old
Child can make deposits, but parent have to makethe withdrawals
The parent is also on the account with the child
Usually no minimum or very little minimum balance(ex. $5 - $10)
Earns interest
Statement Savings – A regular savings account thatyou receive a statement at the end of each quarter.(unless you have a checking account, then usually on amonthly statement)
Can usually be opened without a parent if under 18 years old
Usually has a minimum balance to avoid a fee (ex. $100minimum)
Earns the interest on monthly basis
You are responsible for balancing account register with thestatement
Can get an ATM card with this type of savings – usually haveto be 18 years old to have card (it’s not a debit card, can only beused at ATM for withdrawals & deposits)
Most common type of savings account
Money Market – A savings account that has checkwriting privileges
Usually has a minimum balance to avoid a fee and earninterest (ex. $1000 - $5000 minimum)
The interest may vary depending on the balance of theaccount, usually a tiered system
Usually allowed an ATM card
Receive a monthly statement, you’re responsible tobalance checkbook
Allowed to write six checks a month (if you exceed 6,there is a fee – this is a government regulation)
Can make unlimited deposits or withdrawals with a bankteller
If account overdrawn, there is usually a fee (ex. $35 - $40fee)
Banks look at savings accounts as short terminvestments (give low interest rates)
CD’s - Certificate of Deposit
Minimum balance
Better interest rates
Most have a minimum amount of time you mustkeep your money in
Penalty if you withdraw your money early
VeryLiquid
SavingsAccount
CD
StocksandBonds
Car
House/Property
NotLiquid