Types of Savings Accounts
The four different types of savings accounts.
What are Traditional, Online, Money Market, & Certificate of Deposit (CDs) savings accounts?
Jeremy is a 17-year-old junior in high school and just started his first job. He wants to open a savings account. Which of these will he need to bring to the local bank branch in order to start an account?
a. A letter from his school
b. A letter from his parents
c. An adult cosigner because he is under 18
d. An adult cosigner because he is still a student
An adult cosigner because he is under 18.
Which of the following is an effective strategy for personal saving?
a. Wait until the end of the month and save whatever is left in your checking account
b. Save a certain percentage of each paycheck and deposit it directly in a savings account
c. Cover all of your wants and needs and save whatever is left over
d. Take out a payday loan so you can save before you receive your paycheck
Save a certain percentage of each paycheck and deposit it directly in a savings account.
You are developing a savings plan and using short-, medium- and long-term goals to motivate you. Which of the following might you pick as the most long-term goal?
a. Saving for retirement
b. Saving for a down payment on a home
c. Saving to buy a car
d. Saving to go on vacation
Saving for retirement.
Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?
What is a Certificate of Deposit?
Suppose you open a Money Market account with the minimum required amount of $500 and contribute an additional $200 per month. How much money will you have after 3 years?
$7719.23
What would be a good time to spend money from your Emergency Fund?
a. You lose your job but still have bills to pay
b. Your friend tells you that you should buy as much Bitcoin as possible
c. Your favorite artist releases a new album and you just have to buy it
d. Your friends are going on an expensive trip an you would like to go with them
You lose your job but still have bills to pay.
Write one major difference between saving and investing your money.
Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
30 months.
All of the following are good strategies to develop savings habits EXCEPT...
a. Start with a small goal and gradually get more ambitious
b. Take a percentage of your paycheck and deposit it directly into a savings account
c. Avoid spending money that you don't have and running up credit card debt
d. Request to be paid in cash so you can save a certain percentage of your money in a shoebox in your room every month
Request to be paid in cash so you can save a certain percentage of your money in a shoebox in your room every month.