WHY SAVE?Savings Accounts

Why Save

Unexpected expenses

Opportunities

Major Purchases

Flexibility

Achieve Long Term Goals

Savings Strategies

Save First Just like paying a bill put money from your

checking account 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 goes straight into savings

Savings Accounts

Custodial Savings – Savings account for a minor Can have savings account until child is 18

years old Child can make deposits, but parent have to

make the withdrawals The parent is also on the account with the

child Usually no minimum or very little minimum

balance (ex. $5 - $10) Earns interest

Savings Accounts Cont…

Statement Savings – A regular savings account that you receive a statement at the end of each quarter. (unless you have a checking account, then usually on a monthly statement) Can usually be opened without a parent if under 18 years

old Usually has a minimum balance to avoid a fee (ex. $100

minimum) Earns the interest on monthly basis You are responsible for balancing account register with the

statement Can get an ATM card with this type of savings – usually

have to be 18 years old to have card (it’s not a debit card, can only be used at ATM for withdrawals & deposits)

Most common type of savings account

Savings Accounts Cont…

Money Market – A savings account that has check writing privileges Usually has a minimum balance to avoid a fee and earn

interest (ex. $1000 - $5000 minimum) The interest may vary depending on the balance of the

account, usually a tiered system Usually allowed an ATM card Receive a monthly statement, you’re responsible to balance

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 bank

teller If account overdrawn, there is usually a fee (ex. $35 - $40

fee)

Savings Accounts Cont…

Banks look at savings accounts as short term investments (give low interest rates)

CD’s - Certificate of Deposit Minimum balance Better interest rates Most have a minimum amount of time you

must keep your money in Penalty if you withdraw your money early

Liquidity - how easily your money is exchanged for cash

Very Liquid

Savings Account

CD

Stocks and

Bonds

Car

House/ Property

Not Liquid