Vocabulary
What is a saving plan?
A strategy for using money to reach important goals and to advance a person's financial security.
What are the four factors to consider when opening a savings account?
Convenience, competitive interest rates, low minimum balance, and no interactivity fees.
What is Interest?
The amount that is paid for using money.
What type of account:
Also called a regular savings accounts that pays interest and allows deposits and withdrawals?
Passbook savings accounts
What is a certificates of deposit?
a savings account that requires a deposit of a fixed amount of money for a fixed period of time, known as a term. When the term is up, the money can be kept in the CD, deposited in another CD, or taken out.
What is financial security?
The ability for an individual to meet essential needs without taking on more debt than can be repaid.
What does SMART goal stand for?
specific, measurable, achievable, realistic, and time related.
How do you calculate interest?
Principal (P) × Rate (R) × Time (T) = Interest
What type of account:
the bank sends a statement that summarizes the activity of the account for a specific period of time usually a month
Statement savings accounts
Ask these questions when shopping for a CD?
What is the current APY? What is the maturity date? What is the dollar amount of earnings if the certificate is held to maturity?
What is time of money?
The idea that money decreases in value over time.
What are some saving products?
passbook savings account, statement savings account, and online savings account.
What is the rule of 72?
An equation that estimates how long long it will take to double an investment with a fixed interest rate.
What type of account:
A savings account with an internet bank generally offers a higher yield than other financial institutions.
Online only savings account
What is a CD sometimes called?
Time deposit or time account.
What is simple interest?
Interest earned only on the principle.
What can you get on a rewards savings account?
You get a extra reward for opening the account.
What does inflation do to the value of your savings over time?
Inflation reduces the value of your savings over time
What type of account:
An account that pays a higher interest rate than passbook and states savings accounts.
High yield savings accounts
Do CD pay a higher rate of interest? Why?
Yes ,because they require you to commit your money for a period of time.
What is a Brokerage firm?
a financial institution that facilitates the purchase and sale of financial securities by buyers and sellers.
Can you get interest on a savings account?
Yes but it only a little bit.
What is future value?
Value of an amount of money invested with compound interest at the end of a specified time period.
What is a interest bearing savings accounts
a type of demand deposit account that pays interest and allows for regular deposits and withdrawals.
Type of CD:
a CD that requires a larger minimum balance than a regular CD. In return for the larger minimum balance, a jumbo CD usually pays a higher interest rate than a regular CD.
Jumbo Certificates of Deposit