Thats Life!

A Penny Saved is a Penny Earned

1. Complete the following chart regarding different types of savings options and insert it onto your website under a separate tab for Savings. Description A bank account that earns interest. Advantages It allows you to set up a system for monthly deposits into a specific account. You earn interest and no minimum balance is required Disadvantages You cannot run a debit card off of a savings account. If money is needed from that account, putting it into a checking account may take some time. Therefore, trips to the bank will be needed. They allow you to keep your money on deposit for a set time frame before withdrawal of any money (early withdrawal has penalties). You need to pay for early withdrawal rights

Savings Account

Certificate of Deposit

Money Market

A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years. Trade in shortterm loans between banks and other financial institutions.

They are typically very safe. The FDIC insures customers CDs at a member bank. CDs offer you a fixed variable interest rate and you will be able to anticipate the rate your balance grows which makes plans for the future much easier. Also, they earn steady interest at a higher rate than most regular savings accounts. Funds in money market accounts are highly liquid and can be withdrawn as cash or transferred to other accounts

Money market deposit accounts allow few withdrawals per month and higher balance

(Liquidity), Money market accounts are a safe investment, although their interest rates are low, because they are insured by the FDIC, and they earn higher interest than savings accounts.

requirements,

Traditional IRA

A tax-deferred retirement savings account. You pay taxes on your money only when you make withdrawals in retirement.

Roth IRA

An individual retirement account allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59 are taxfree.

No current taxes due at distribution if a direct rollover. Assets are invested in a tax-deferred environment. Opportunity to invest the cash that would otherwise go to taxes until ultimate distribution. You may qualify to convert the traditional IRA to a Roth IRA. You can still contribute to a Roth IRA even if you participate in other qualified retirement plans. You can make contributions to your Roth IRA after you reach age 70 1/2 if you have earned income. In contrast, individuals age 70 1/2 or older cannot make

The tax rate on amounts distributed from the IRA may be higher than if they had been taxed under ten-year averaging.

Since some individuals may never live to see retirement age, they might not experience and enjoy the tax benefits of a Roth IRA. Congress may decide to change the tax-free withdrawal allowance for Roth IRAs in the future.

contributions to a traditional IRA.

Sources:

http://www.investopedia.com/terms/c/certificateofdeposit.asp http://www.ask.com/question/advantages-and-disadvantages-of-a-savings-account http://voices.yahoo.com/the-pros-cons-bank-money-market-deposit-accounts5193495.html http://lifedesignanswercenter.fidelitybankonline.com/page.php?c=860 http://www.bizactions.com/showopp.cfm/spid/597/art/1626/ind/US/ http://www.ally.com/cds/certificates-of-deposit-cd-pros-and-cons/

2. Prepare a visual aid (i.e. Powerpoint, Prezi, table, etc.) that displays information from three different banks comparing services offered and fees charged for those services. Then, rate the financial institutions based on the data you have collected. The following information must be included in your final product and you must upload this assignment to your Economics Portfolio under the Savings tab. Name of financial institution One checking account product from that institution o Include minimum balance required, fees charged and interest earned. One savings product from that institution o Include minimum balance required, fees charged and interest earned. Rating of each institution (scale of 1-3, with 1 being the best) and why
Checking Products/ Minimum Balance/ Bank Card included Overdraft Protection Basic Checking services No Minimum Balance Check Card and ATM Charge for Checks No overdraft Grace period Savings Account Mthly maintenance Minimum Balance Fees Savings Interest Rating 1-3 The Best/Why

Financial Institution

Min. Balance= $50.00 Mthly fee $5.50 per withdrawal after (6) $1.00 per phone call after 4 monthly $400.00 ledger balance /fees

0.01% APY on all balances

Third Best primarily because of lack of incentives for customers. There is a charge for checks and no overdraft protection. In addition customers are charged for phone calls .Savings balance requirement without fees are

 AsteriskPlus Checking No minimum balance Free Checking Unlimited Checks 24 hour overdraft Grace period

waived Online Banking Regular Savings accounts Monthly maintenanc e fee of $25.00 waived with $300.00 balance ATM Card with no fee Online and mobile Banking Regular Savings Minimum deposit = $25.00 $5.00 monthly fee 3 withdrawals each month Online banking

excessive.

0.02% APY on all balances

Offers the best value. Highest interest earned on balance. No minimum balance required and a 24 overdraft Grace period is standard. Innovative with Mobile Banking as a standard feature

Requires (1) 250.00 deposit monthly to avoid fees $12.00 mthly fee if balance falls below 250.00 Overdraft Prot. Includes Debit Card

0.01 % APY on all balances

Second best value, Checking account requires consistent monthly deposits with 250.00 minimum. Overdraft protection is optional but minimum savings balance is only $25,00

3. Finally, prepare a savings plan for yourself. You need to include how you save in the present, how you plan to save in 5 years and how you hope to save in 10 years. This should include such details as short and long term savings as well as retirement. This should also be uploaded to your website under savings. Ericas Savings Plan Today
Contribution Tithes & Offerings Loose Change savings Deposited in Credit Union Total Monthly 20.00 month 50.00 month Annual $240.00 $600.00 $840.00 year

5 years from now

Contribution Tithes & Offering 10% of income Short Term Savings Long Term Savings Invest in 401k Total Monthly 70.00 50.00 25.00 900.00 Annual 840.00 600.00 300.00 10,800 12, 540

10 years from now Contribution

Tithes & Offering 10% of income Short Term Savings Long Term Savings Invest in 401k Total

Monthly
70.00 150.00 500.00 2000

Annual
840.00 3300 11,000 24000 39,140