1. Managing Your Cash

2. Cash Management Cash Management
The daily routine of handling money to take care of individual or family needs.

3. Cash Management
Effective cash management includes having available money for:
Living expenses;
Emergencies;
Savings;
Investing.

4. Cash Management Tool Five types of cash management tools:
Checking Account
Savings Account
Money Market Deposit Account
Certificate of Deposit
Savings Bond

5. Checking Account Checking Account Features may include:
Tool used to transfer funds deposited into an account to make a cash purchase.
Checking accounts may be non-interest or interest earning.
Features may include:
Minimum balance requirements;
Charge transaction fees;
Limited number of checks written monthly.
Reduces the need to carry large amounts of cash.

6. Savings Account Savings Account
Account to hold money not spent on consumption.
Have a lower interest rate than other cash management tools

7. Money Market Deposit Account
A combination savings/investment plan in which money is used to purchase safe, liquid, securities
minimum balance requirement
tiered interest rates- amount of interest earned depends on the account balance
For example: a balance of $10, will earn a higher interest rate than a balance of $2,500.

8. Money Market Deposit Account continued
limited to three to six transactions each month
Features of may include:
Minimum amount required to open the account
often $1,000
balance falls below a specified amount
earn a lower interest rate

9. Certificate of Deposit (CD)
A deposit that earns a fixed interest rate for a specific length of time
Interest rates vary depending upon specified time length.
The longer the length, the higher the interest rate.

10. Certificate of Deposit continued
Features may include:
Range from seven days to eight years in length;
Minimum deposits range from $100-$100,000;
If funds are withdrawn before the expiration date, penalties are assessed;
Different types to fit your needs
Standard- fixed
Flexible- can add money and withdraw on occasion free of charge

11. Savings Bonds
A registered, non-transferable bond issued and backed by the U.S. Government
"the All American Investment"
easy way to save money safely
get a good market return
Rates change every May and November based on either current market rates or inflation.

12. Savings Bond
Can buy from bank, through payroll deductions or from Federal Reserve
Two types
I Bond-
state and local income tax exempt
federal income tax can be deferred
If cashes in before five years
subject to a 3-month earnings penalty
earn interest for as long as 30 years

13. Savings Bonds Series EE Savings Bond Government tracks bond by SS#
Earn fixed rate of return
Buy for 50% of face value
Minimum $50 bond- Max $10,000 per year
$50 bond
Buy for $25
When mature you receive $50
20 years to maturity
Government tracks bond by SS#

14. Average Interest Earned
Cash Management Tools
Tool
Average Interest Earned
Purchase Place
Special Features
Checking Account
1.5%
Commercial Banks, Savings & Loan Associations, Credit Union
Can be used in place of cash, funds can be easily accessed
Savings Account
2.3%
Easily accessed, temporary holding place for funds
Money Market Account
2.6%
Minimum balance, limited transactions, tiered interest rates
Certificate of Deposit
4.0% - 5.4%, depending on the length of deposit
Commercial Banks, other institutions which accept deposits for a fixed period
Penalties for early withdrawals, no deposits or withdrawals are made after initial investment
Savings Bonds
4.0% - 5.4%, depending on the length of bond
Commercial Banks, Credit Unions, employer payroll deduction plans
Tax advantages, a loan to the federal government

15. Liquidity
Liquidity
How quickly and easily an asset can be converted into cash.
Investors should:
Invest in both liquid and non-liquid tools.
Liquid assets are important for emergencies when cash must be quickly accessed.
Cash management tools are protected by the U.S. Government against loss.

16. Liquidity Checking Account Most Liquid Savings Account
Money Market Deposit Account
Certificate of Deposit
Savings Bond
Least Liquid

17. Low Risk These five cash management tools are low risk:
Insures the funds so the consumer does not lose money on the investment.
However, they have lower interest rates.
Causes low returns

18. The End