Saving Money
What are savings?
Savings are the part of your income that you do not spend.
What is a commercial bank?
A commercial bank is a financial institution that provides a range of financial services to customers.
What does investing mean?
Investing means using your savings in the hope of making a profit, usually earning more than you would from an ordinary savings account.
What are two examples of investments?
Buying shares in companies and buying property are two examples of investments
Why do people save money for future wants?
People save to buy something they want in the future, such as new clothes or a car.
What is a demand account?
A demand account allows you to add or withdraw money whenever you like.
What does AER stand for?
AER stands for Annual Equivalent Rate.
What is an investment risk?
Investment risk is the possibility that you could lose some or all of the money you invested.
Why should people save for unforeseen events?
To have money available for rainy days, such as repairing a broken boiler.
What is a notice account?
A notice account requires you to give the bank notice, such as 30 or 40 days, before withdrawing money.
Why is AER useful?
AER shows the true annual rate of interest and allows you to compare savings accounts from different financial institutions.
What does it mean to convert an investment to cash?
It means selling or changing the investment so that you receive cash. Some investments, such as shares, are easier to convert to cash than property.
What is interest?
Interest is the amount of money a financial institution adds to your savings as a reward for keeping your money with them.
What is a fixed-term account?
A fixed-term account requires you to leave your money in the account for a set period, usually from three months up to 10 years.
What is simple interest?
Simple interest is calculated only on the original amount of money deposited.
What is cryptocurrency?
Cryptocurrency is a digital or virtual currency that is not controlled by a central bank and can be transferred directly between people over the internet.
What is the Deposit Guarantee Scheme?
It is a government scheme that guarantees to replace savings up to €100,000 if a financial institution cannot do so.
What is a credit union?
A credit union is a co-operative organisation where members save money and lend to each other at low interest rates.
What is compound interest?
Compound interest is calculated on the original amount plus any interest already added to the account.
How are cryptocurrency transactions verified?
Transactions are verified by a miner, who is paid in cryptocurrency for providing this service. The transaction is then recorded in a public digital ledger.