Saving Money Short Term

Banks make money by taking deposits and lending the money to other people at a higher interest rate

Checking and savings accounts can be liquidated (changed into cash at any time)

Checking and savings accounts will never pay high yields (returns on your money)

The more time you promise the bank that you will let them use your money, the higher the interest rate the bank will offer

Why do we save money?

CarHouseChild’s educationRetirementHome improvements

The worst thing to do is leave your money in a place where it does not earn any interest (like under your mattress!)

Cash will lose between 1-3% of value every year

Checking Accounts

ConvenientAllowed to draw checks on the

balanceLittle to no interest is paidLook into if a minimum balance is

requiredDo you need a savings account with a

minimum balance as well?

Savings Accounts

Can take money out if necessaryDoes not get very good interest

Time Deposits

CD (Certificate of Deposit)Promise the bank you will not

withdraw the money before a set dateBank will give you a higher interest

rate (usually one to two percentage points higher)

CDs

Minimum deposit is requiredCan range from 30 days to 10 year

incrementsWhen maturity date come- you can get

the amount you invested plus accumulated interest

Stiff penalties for early withdrawal or principal from a CD

Can rollover the balance