SAVINGS

1. SAVINGS Key Terms: liquidity, term, money market account, certificate of deposit, savings bonds

2. Factors for Choosing Savings Options Safety and Risk Liquidity Earnings Taxes Restrictions Fees/Service Charges

3. SAFETY AND RISK FDIC Federal Deposit Insurance Corporation Insurance means safety! NCUA National Credit Union Association Individual account options

4. LIQUIDITY Defined�the ease with which savings or investments can be turned into cash to be spent Fixed term�period of time during which money must be kept on deposit

5. EARNINGS Check out the APY (Annual Percentage Yield) Higher APY = greater earnings

6. TAXES You are required to pay income tax on interest earned. Some savings options offer tax advantages.

7. RESTRICTIONS There may be certain requirements! For example: Required deposit amount Maintain a certain balance Limited transactions

8. FEES AND SERVICE CHARGES Questions concerning fees and charges ATM charges? Monthly fees? Fees if below minimum balance? KNOW ALL ABOUT YOUR ACCOUNT!

9. SAVINGS OPTIONS Savings Accounts Money Market Accounts Certificates of Deposit Savings Bonds

10. SAVINGS ACCOUNTS Most liquid Low minimum balance Fewer restrictions Interest usually low Monthly statement Deposits Withdrawals Interest earned

11. MONEY MARKET ACCOUNTS Deposits invested by financial institution Yield higher earnings Higher interest rate More restrictions May write checks Limited number Withdrawals limited Deposits limited

12. MONEY MARKET ACCOUNTS Do not confuse with money market funds Mutual fund (investment)

13. CERTIFICATES OF DEPOSIT CERTIFICATES Specify the amount deposited Specify the interest rate Specify the length of term Terms usually: 3 months-5 years Minimum $1,000-$100,000

14. CERTIFICATES OF DEPOSIT Defined�a certificate issued by a financial institution to indicate that money has been deposited for a certain term

15. SAVINGS BONDS Non-transferable debt certificattes Issued by U. S. Treasury You purchase; you loan Extremely safe Government backed Tax exempt (local and state tax) Federal Tax Deferred

16. SAVINGS BONDS Defined�nontransferable debt certificates issued by the U. S. Treasury. When you buy, you are loaning money to the federal government.

17. SAVINGS BONDS THREE TYPES OF SAVINGS BONDS Series EE Series HH Series I

18. WHY SAVE? Accumulate money for future purchases To earn income

19. SAVE OR INVEST? MAIN PURPOSE: Saving�to set aside money for some anticipated future need Investing�committing money for the purpose of making a profit over time

20. SAVING INVESTING Setting aside money for future use Bonus: Interest Earned No Risk Withdrawals at any time Time to decide if you really want item Allows you to spend wisely Committing money to make profit over time Grows in long run Risks involved Not easily accessible Often begins with saving

21. REASONS FOR SAVING EMERGENGIES RECURRING EXPENSES FUTURE PURCHASES FINANCIAL GOALS RETIREMENT

22. Food for Thought Saving delays purchase until you have money Takes time Credit leads to more spending Pay interest Buy more It�s easy

23. FINANCIAL GOALS CHANGE FAMILY LIFE STAGES 1. Marriage 2. Parenthood 3. Children Moving Out 4. Aging

24. SAVINGS PLAN STEPS TO SAVINGS 1. Decide what you�re saving for 2. Set a specific goal 3. Break long-term goal into short-term goals 4. Save regularly and consistently 5. Keep your savings goals in mind

25. AUTOMATIC SAVINGS Automatic Transfers checking to savings or savings to checking Direct Deposit employer to employee�s bank account Payroll Deductions save/invest by paycheck withdrawal

26. REMEMBER STICK TO YOUR GOAL! PAY YOURSELF FIRST!