1. Savings Options

2. Assignment
Go to the 3 ring binder and find the savings options organizer.
Fill this organizer in as you view this PowerPoint.

3. Savings Account Examples: Passbook Savings Interest: Withdrawal Rules
Lower interest rate than other saving options
Interest rates sometimes higher when your balance is higher
Withdrawal Rules
Regulation D: Make 6 withdrawals within a statement cycle
Advantages
Safe, small opening deposit, earn interest

4. Certificate of Deposit (CD)
CD: deposit that earns a fixed interest rate for a fixed period of time.
Interest:
Higher interest rates because the bank knows how long you will keep the $ on deposit…so they can offer you higher rates than a savings account.
Generally the longer the period of time you invest your money the higher your interest rate (or rate of return) will be.
Withdrawal Rules:
Pay % of interest designated by the bank for early withdrawal.

5. Certificate of Deposit
Advantages
Higher interest rates than a passbook savings
Disadvantages
Your $ is locked up for a specific time period
If interest rates on another option is higher then you can’t take advantage of those higher rates without paying a penalty.

6. Money Market Combination of a savings and a checking account Interest:
Higher interest than regular savings but lower than CDs
Different rates for different balances
Withdrawal Rules:
Regulation D…but 3 of your withdrawals can be checks
Advantages:
Higher interest rate than a passbook savings
Unlimited transfers electronically
Disadvantages:
Amount of times you can withdraw your $

7. Government Bond
US Government owes you the amount of the bond plus interest
Interest:
Call treasury department for redemption table or go to your local bank.
Withdrawal Rules:
Can sell your bond at any time without penalty; you just wouldn’t earn the full amount of interest until the bond matures
Advantages
Safe way to invest your $

8. Annual Percentage Yield (APY)
Interest the account will earn in 1 year
Helps compare rates at different banks