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Saving & Investing

Saving & Investing. Chapter 6. Chapter 6 – Section 1. Why Save?. Main Idea:. Savings consist of income set aside for future use. How does that benefit YOU (the individual)? A person receives interest on a savings plan for as long as the funds are in the account.

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Saving & Investing

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  1. Saving & Investing Chapter 6

  2. Chapter 6 – Section 1 Why Save?

  3. Main Idea: • Savings consist of income set aside for future use. • How does that benefit YOU (the individual)? • A person receives interest on a savings plan for as long as the funds are in the account. • How does that benefit THE ECOMONY? • It provides funds for others to invest or spend. • It allows businesses to expand, which provides increased income for consumers and raises the standard of living.

  4. Trade-Offs • Some savings plans allow immediate access to your funds but pay a low rate of interest. • Others pay higher interest and allow immediate use of your funds, but require a large minimum balance.

  5. Savings Accounts • Savings Account ~ Account that pays interest, has no maturity date, and from which funds can be withdrawn at any time without penalty. • Money Market Deposit Account (MMDA) pays relatively high rates of interest, requires a minimum balance of $1,000 to $2,500, and allows immediate access to funds.

  6. Time Deposits • require savers to leave their funds on deposit for certain periods of time, or maturity. • Time deposits are often called certificates of deposit (CDs), or savings certificates.

  7. Insuring Deposits • After the stock market crash of 1929, the Federal Deposit Insurance Corporation (FDIC) was created to protect peoples’ funds. • Insures up to $250,000 for each separate account • 1/1/2011 - will be adjusted for inflation

  8. Money Now or Later

  9. Review (or Bell Ringer): Access Any Time Higher Interest Best Interest High Deposit Needed Time Deposit Lower Interest

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