Working With Checking and Savings Accounts - The Homer Fund

More documents

Recommendations

Info

Checking and Savings Accounts Study Objectives Underline/highlight the answers to these questions as you read: 1. What are checking and savings accounts? 2. What is interest? 3. How can interest affect your savings? 4. What are the benefits of having a checking or savings account? How you manage money affects your ability to meet present and future needs. There are tools, such as checking and savings accounts that can help you. Financial institutions offer checking and savings accounts so that you have a safe and secure place to keep your money. You can deposit and withdraw money from both checking and savings accounts. Checking accounts also allow you to write checks. When someone cashes a check you have written, money is withdrawn from your account. 4
Earning Interest A financial institution may pay you for keeping your money in one of its accounts. This payment is called interest. The interest you receive is calculated as a percentage of the total funds you have in your account. For example: If you deposit $50 at the beginning of each month and do not withdraw any money: Interest Rate 1 Year 3 Years 5 Years 10 Years 20 Years ($50 x 12 Months) 0% $600 $1,800 $3,000 $6,000 $12,000 3% $610 $1,886 $3,240 $7,005 $16,456 5% $617 $1,946 $3,414 $7,796 $20,637 7% $623 $2,008 $3,601 $8,705 $26,198 9% $630 $2,073 $3,799 $9,748 $33,645 The top row (0 percent interest rate) illustrates how much money you will save by saving $50 at home each month. The rest of the chart illustrates the amount of money you can save by putting aside $50 each month in an account that pays you interest. For example, if you put aside $50 each month at home, after three years you will save $1,800. If you deposit the same amount of money in an account that earns 5 percent interest, you will save $1,946 in three years. The financial institution will pay you $146 in interest for keeping your money in an account. As you can see, an interest-earning account helps your money to grow. The following graph shows that you can save significantly more money over the same period of time by keeping your money in an account that pays you interest. Assuming that you deposit $50 each month into an account, observe how much more money you will earn over time in an account that pays you 5 percent interest or 9 percent interest. 5
Page 1 and 2: Personal Financial Skills: WORKBOOK
Page 3 and 4: Introduction . . . . . . . . . . .
Page 5: 2 1. When you want to purchase some
Page 9 and 10: Opening an Account When you decide
Page 11 and 12: SELF-ASSESSMENT 2 1. To open a chec
Page 13 and 14: Endorsing a Check Endorsing a check
Page 15 and 16: Writing a Check If you have a check
Page 17 and 18: Using a Check Register A check regi
Page 19 and 20: Reading Your Account Statement At t
Page 21 and 22: Balancing Derek’s Checkbook Exerc
Page 23 and 24: Check Register Date Check # ✓ Des
Page 25 and 26: Saving with Direct Deposit Once you
Page 27 and 28: If you report your card missing:
Page 29 and 30: When you write a check, your accoun
Page 31 and 32: To review the concepts discussed in
Page 33 and 34: Using Keisha’s Check Register Exe
Page 35 and 36: 4. Write the following checks: Your
Page 37 and 38: Account statement - This is a recor
Page 39 and 40: Federal Deposit Insurance Corporati
Page 41 and 42: Stop payment - An order by a custom
Page 44: 4000 Wisconsin Avenue, NW North Tow

Working With Checking and Savings Accounts - The Homer Fund

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?