Personal FinanceSECTION 5.2

Types of Savings Plans

Regular Savings Accounts

Certificates of Deposit

Money Market Accounts

U.S. Savings Bonds

Regular Savings Accounts

Certificate of Deposit (CD)

Savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return.

The period of time is called the term.

The date when the money becomes available to you is called the maturity date.

Low risk way to invest your money.

CD Trade Offs

To get higher interest rate you must

CD Investment Strategies

Find out where you can get the best rate

Considering the economy as you decide maturity date You may want to buy a long-term CD if interest rates are relatively

high

Money Market Accounts

Savings account that requires a minimum balance and ears interest that varies from month to month.

U.S. Savings Bonds

Are debt securities issued by the US Department of Treasury to help pay for the U.S. Government’s borrowing needs.

Evaluating Savings Plans

Rate of return

Compounding

Evaluating Savings Plans

Annual Percentage Yield

Evaluating Savings Plans

Inflation

Evaluating Savings Plans

Tax Considerations

Liquidity

Evaluation Savings Plans

Restrictions and Fees

Types of Checking Accounts

Regular Checking Account

Activity Accounts

Interest Earning Checking Accounts

Evaluating Checking Accounts

Restrictions

Fees and charges

Interest

Special Services