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Uncle Al and the Banking Project

Uncle Al and the Banking Project. What is the maximum amount of money I can make in interest over 5 years with a $5,000 dollar investment? By Lauren Andrew. Definitions of Accounts.

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Uncle Al and the Banking Project

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  1. Uncle Al and the Banking Project What is the maximum amount of money I can make in interest over 5 years with a $5,000 dollar investment? By Lauren Andrew

  2. Definitions of Accounts • Checking Account: A checking account allows you to frequently access your funds. Often has a low interest rate because of accessibility. • Savings Account: A savings account may require a low daily minimum balance. This kind of account is ideal if you would like to set away money for an extended period of time. • Certificate of Deposit (CD):A CD requires that you put away a certain amount of money for a specific amount of time. Once the money is in, you cannot access it until the time period has ended. • Money Market Account: This account requires a larger minimum opening and daily balance. This is good if you need to set aside a larger amount of money, but would still like to retain access to the account without fees.

  3. Types of Banks • Big Bank: These banks often have locations is many spots across the country and provide for easy access to accounts. • Credit Union: A credit union is a cooperative financial institution that is privately owned and controlled by it’s members. • Online Bank: Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union, or building society.

  4. Online Banking • Average rates Online Banking Rates • 5 Year CD2.86% APR 2.50% APR 2.78% APR • E*tradeFinancial • Minimum deposit of $1.00 • .60% Interest rate • $300.00 made after 5 years • Huntington • $2,500.00 to $9,999.00 • 0.05%

  5. Credit Union Rates • Greater Nevada Credit Union • Deposit: $.01-$50,000 • 2.00% APR • Royal Banks of Missouri • 4.30% APY when conditions are met • Minimum of 10 debit card purchases (ATM usage does not count toward the 10 purchases) • 1 Automatic Payment or Direct Deposit transfer • Receive your monthly account statement electronically • Does not seem secure enough to trust… • Possible hidden fees

  6. Big Bank Rates • Wells Fargo- CD • 27 months (Renews for 24 month term) • 1.90% APR • Minimum Deposit $5000 • After 5 years $475 would be made • Bank of America-CD • 5 years- 2.75% APR • Minimum Deposit is $1000 • After 5 years $687.5 would be made • Citibank-CD • 5 years-3.50% APR • Minimum Deposit is $1000 • After 5 years $875 would be made

  7. Conclusion • If I invest my money into a CD with Citibank, I will make $875.00 in interest over 5 years vs. the $500.00 Uncle Al would make through his bank. • Because it is a CD, I would be allowed to deal with the money after each year, so that if I was allowed to access it for college, I would have this option. • Therefore, I should be allowed to invest Aunt Edith’s $5,000 dollars into Citibank so that I will make $375.00 more dollars over five years.

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