SAVINGS ACCOUNTS
Federal Deposit Insurance Corporation (FDIC) insures up to
$250,000 per account
Formula that represents simple interest calculation?
I = Prt
Money market account are different from savings accounts by offering
hgher interest rates
A Certificate of Deposit (CD) guarantees
fixed interest until maturity
The annual percentage rate (APR) represents
Yearly interest rate expressed as a percentage
with a joint savings account the FDIC insures
up to $250,000 per person
In the simple interest formula, what does 'r' represent?
interest rate
Money Market Accounts require higher
minimum balances and higher initial deposit
The maturity date of a CD indicates
The specified future date when funds can be withdrawn without penalty
What is a minimum balance?
the lowest amount of money you have to have in an account.
Which type of savings account provides a monthly statement of all financial activities?
Statement Savings Account
Simple interest is calculated based on
Original principal only
Money Market Accounts may limit monthly
transactions
What does maturity date mean?
The end of a fixed amount of time
Name 3 services banks offer?
- Savings accounts - Money market accounts
- Certificates of deposit - Loans
- Life insurance policies - Safe deposit boxes
- Credit and debit cards - Checking Accounts
What happens if a savings account falls below the minimum balance
you will get a fee and/or not earn any interest
In the simple interest formula, what does 'P’ represent?
Prinicipal
What is a benefit of a Money Market Account?
You can earn more money in interest
What can you do when your account reachers maturity?
you can access your principal and earned interest
Why does a bank want to make a profit?
It allows them to grow as a business, distribute interest to account holders, and maintain financial stability to pay employess.
Banks make profits on savings accounts by
Lending deposited money at higher interest rates
In the simple interest formula, what does 't’ represent?
Time expressed in years
What is a disadvantage of a Money Market Account?
you have to have a higher initial deposit, higher minimum balance, and you have limits on the amount of transactions.
How long do CD accounts take to mature
They can be from 7 days to 10 years.
No, however they are insured by the Federal Deposit Insurance Corporation which is a government agency.