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Savings ToolsAdvanced Level

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© 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

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© 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