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Published byThomas McGee Modified over 8 years ago
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Type of accountWhat it is? What does it do? Risk LevelFDIC Insured? Savings/Checking Certificate of Deposit Individual Retirement Account Stock Market Investment
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Provides a safe place to store your money Provides other financial services › Credit Cards › Loans Privately owned › Why own a bank? What is the incentive(s) to put your money in the bank?
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Interest is a fee paid for services given How can interest work both for the bank and for you?
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Compounding Interest › The amount of times interest is applied to your account When do you want interest to compound vs. when do you not want interest to compound? What does the difference really mean? What does the difference really mean?
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Proximity and Hours Rates Services and Service Charges Staff
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Federal Deposit Insurance Corporation › A government organization that provides insurance to your bank account in case the bank closes › Remember the Great Depression?? 5000+ banks closes in a 2 years time period with no insurance on ppl’s accounts Savings are lost, confidence in the banks are lost
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Savings/Checking › Usually no deposit requirements (but check to make sure!) › Low or no interest Rates › Frequent withdrawals allowed with no penalty (usually) FDIC Insured? YES!
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Why is it important??
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Be sure to cross check your check book and your monthly statement for accuracy and uncashed checks
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_________________________ Check # 251 Stonehaven Road Fall River, MA Date: Pay To The Order Of: ____________________________________________ ____________________________________________________________________Dollars Bank of Furtado For: _______________________________ ________________________________ ::243918234:: 2412382 #
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Cable bill to Comcast for $152.42
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DateCheck # Check To / Purpose AmountStart Balance End Balance
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Certificate of Deposit (CD) › Slightly higher interest rates than saving › Must keep $ in for a set amount of time or else you will be penalized › The longer the term, the more interest FDIC Insured? YES!
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Physical Bank Virtual Bank Instant Withdrawals and Deposits An actual place to go visit and talk to employees in person Lower rates A bank that exists on the internet Cannot go to an actual branch Higher rates Usually takes a couple days for transfers
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Questions to consider… Does your job have a pension? When do you start collecting social security? Do you have a separate IRA?
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What is a pension? Does everyone receive a pension? A percentage of your annual salary that will be paid to you upon your eligible retirement date until a certain time NO!
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What is social security? › Money benefits given to working people who have paid in SS fund Who receives SS? › 65 years and older
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Individual Retirement Account (IRA) › Set amount can be taken out of your paycheck every pay period › Tax Deductable (What?) › Usually invested in low risk areas to create higher interest than normal › 403B, 401K FDIC Insured? NO!
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Pension Social Security IRA $ Total/Month: $
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Stock Investments › High Risk › High Earnings potential › Usually need a set amount of $ › No time requirement › Do your research! FDIC Insured? NO!
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Briefly explain the process in which banks make a profit. Why are banks an important part in the success or failure of an economy?
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Annual Percentage Yield (APY) › Interest compounded more than once a year › $10,000 › @ 5% interest x ½ year = $250 › $10,250 › @ 5% interest x ½ year › $10,506.25 at the end of the year › 5.0625% APY
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Annual Percentage Rate (APR) › Interest compounded only once a year › $10,000 Deposited › @ 5% interest x 1 Year › $500 earned in interested › $10,500 at the end of the year
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