2.4.3.G1 Savings Tools Advanced Level
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2.4.3.G1
Savings ToolsAdvanced Level
2.4.3.G1
© Take Charge Today –August 2013 – Savings Tools– Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Types of Savings Tools
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© Take Charge Today –August 2013 – Savings Tools– Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Ideal for Storing Emergency Savings
Insured depository institutions offer accounts which are:
How will a consumer know if their depository institution offers secure accounts?
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© Take Charge Today –August 2013 – Savings Tools– Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Savings Tools Characteristics
Each savings tool has different characteristics
Goal: Determine the savings tool most
appropriate for reaching a financial goal
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© Take Charge Today –August 2013 – Savings Tools– Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Checking Account
What are common ways to access funds in a checking account?
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© Take Charge Today –August 2013 – Savings Tools– Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Checking Account Features
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© Take Charge Today –August 2013 – Savings Tools– Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Savings Account
What are common ways to access funds in a savings account?
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© Take Charge Today –August 2013 – Savings Tools– Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Savings Account Features
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© Take Charge Today –August 2013 – Savings Tools– Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Money Market Account
Which would typically earn a higher interest rate? An account with a $10,000 balance or a $2,500 balance?
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© Take Charge Today –August 2013 – Savings Tools– Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Money Market Account Features
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© Take Charge Today –August 2013 – Savings Tools– Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Certificate of Deposit (CD)
Why would a depository institution typically offer higher interest rates for CD’s with a longer time period or more money invested?
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© Take Charge Today –August 2013 – Savings Tools– Slide 12Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Certificate of Deposit Features
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© Take Charge Today –August 2013 – Savings Tools– Slide 13Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Matching Savings Tools to Goals
Consider these factors when determining the most appropriate savings tool for your financial goal
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© Take Charge Today –August 2013 – Savings Tools– Slide 14Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
You Decide: Which Tool is Best?
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© Take Charge Today –August 2013 – Savings Tools– Slide 15Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Analyze the features of a savings tool among depository institutionsTerms and conditions such as interest rates, fees, and minimum balance requirements may vary.
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© Take Charge Today –August 2013 – Savings Tools– Slide 16Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Liquidity
Higher interest rates are a trade-off for lower liquidity
Most Liquid/Lowest
Interest
Least Liquid/Highest Interest
Checking Account
Savings Account
Money Market Deposit Account
Certificate of Deposit
2.4.3.G1
© Take Charge Today –August 2013 – Savings Tools– Slide 17Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona
Understand the features of savings tools to select the most appropriate tool for each financial goal
Summary
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