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Savings Account

Savings Account. Personal Finance. Savings How-To. Make saving a priority in your money routine: First decide how much you can save each month. Each pay period, pay yourself first. Next pay your fixed expenses (rent, food, transportation)

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Savings Account

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  1. Savings Account Personal Finance

  2. Savings How-To • Make saving a priority in your money routine: • First decide how much you can save each month. • Each pay period, pay yourself first. • Next pay your fixed expenses (rent, food, transportation) • Use the leftover, disposable income, for entertainment and shopping. • When you receive unexpected income put it towards saving.

  3. Basic Savings Account • Most of us have basic savings accounts. • These are a great idea, but as you earn more money in your life it makes more sense to find a different type of savings account. • Although basic savings account have a high degree of liquidity, which means that it is easy to deposit and withdrawal money. • The average interest rate on a basic savings account is less than 1%.

  4. Definition: A savings deposit that earns a specific amount of interest over a fixed amount of time. Added Info: You have to put a minimum amount of money into a CD and leave it there for the entire time period Certificate of Deposit Examples: They have less liquidity than a basic savings account, but they have higher interest rates. The average interest rate is about 3%

  5. Definition: A savings account in which your money is invested in securities. Securities: are documents that indicate ownership of treasury bills, savings bonds, and CDs that can be traded on the investment market. Added Info: IT requires a minimum balance and a minimum deposit and limits the amount of money you can withdrawal from it. Money Market Account Example: IT has a higher average interest rate than a basic savings account and CDs. The interest rate on Money Market accounts are referred to as annual percentage yield. About 10%!

  6. Definition: Nontransferable bonds issued by the U.S. government initially sold at half their face value Added Info: You pay 25 dollars for a 50 dollar bond, when the bond reaches its maturity date it will be worth face value. Savings Bond Example: A savings bond that you bought for 25 dollars will be worth 50 dollars in twenty years.

  7. Earning Interest • Each time interest is recalculated, the amount you receive is based on the new larger amount in your account, this is called compounding interest. • http://www.interestcalculator.org/ • The annual percentage yield (APY) is the amount of interest your deposit will earn in a year, expressed as a percentage. • Return- is the amount of interest earned.

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