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Smart Savings Strategies to Secure Your Future

Learn the importance of saving, different savings options like passbook, statement accounts, and time deposits. Understand how saving benefits the economy and discover the best savings plans for your financial goals.

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Smart Savings Strategies to Secure Your Future

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  1. Chapter 6 Savings and Investing

  2. Section 1 Why Save?

  3. Section 1 objectives • The SWBAT identify when they should save • The SWBAT how passbook, statement, and money market accounts differ • The SWBAT describe the advantages of time deposits

  4. Why Save? • Saving • Setting aside income for a period of time so that it can be used later

  5. Deciding to Save • Results of Saving • The whole economy benefits • Provides money for others to invest and spend • Allows businesses to expand, which increases income for consumers and raises the standard of living

  6. Deciding to Save • Where to Save* • Commercial banks, savings and loan associations, savings banks, and credit unions • Interest • The payment people receive when they lend money or allow someone else to use their money*

  7. Deciding to Save • Comparing the best savings plans • Trade-offs • Some plans allow immediate access to your money but pay a low rate of interest • Others pay higher interest and allow immediate use of your money, but require a large minimum balance

  8. Savings Accounts • Passbook savings account • Account for which a depositor receives a booklet in which deposits, withdrawals, and interest are recorded* • Statement savings account • Account similar to a passbook account except that the depositor receives a monthly statement showing all transactions

  9. Savings Accounts • Statement savings account • Main appeal • Offer easy availability of funds* • Money market deposit account • Account that pays relatively high rates of interest, requires a minimum balance, and allows immediate access to money • Trade-off • $1000 to 2,500 minimum deposit; can make withdrawals at any time; only allowed to write a few checks a month

  10. Time deposits • Savings plans that require savers to leave their money on deposit for certain periods of time* • Maturity • The period of time at the end of which time deposits will pay a stated rate of interest* • Certificates of deposit • Time deposits that state the amount of the deposit, maturity, and rate of interest being paid*

  11. Time deposits • Insuring Deposits • Federal Deposit Insurance Company (FDIC) • Created to protect deposits* • Each depositor’s money is insured up to $100,000

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