2/3/14

“Checking accounts”

• After doing your research, which bank would you choose to open a checking account with & why?

On desk: (C-block) Checking account research wksht.

2/3/14

Econ. Agenda

1. Savings Accounts (class notes)

2. Research savings accounts

HW: Savings Accounts research

2/3/14 Class Notes – Saving accounts

You want to go on a week-long vacation to California on August 1st, and you’ve figured out it will cost a total of $1,500. How much do you have to save each month from now until then in order to be able to go on your trip?

2/3/14 Class Notes – Savings accounts

Why save your money?

• You save for larger purchases: house, car, college, babies…

• Emergencies: hospital, parents get sick, natural disasters…

• Starting a business or investing in a company

• Retirement

• Vacations & dreams!!

2/3/14 Class Notes – Savings accounts

How to save your money:

• Important expense every time you get paid should be PYF (Pay Yourself First)• PYF = every time you get paid, you should put some

amount in savings• Can be $5, $10, $20…..or a certain percentage of your

income – it will add up very quickly!

Class NotesWhat is the difference between checking & savings accounts?

• Checking Accounts– $$ you

deposit in bank for short-term to SPEND

– Allows withdrawals (usually unlimited)

• Saving Accounts– $$ you deposit in bank for long-

term to SAVE– Allows withdrawals, but may

have transaction limitations• (Only certain number of

withdrawals allowed per month)

– Bank pays you interest for keeping money in bank!!

• What do banks do with your money?– Banks loan $$

Banks use your $$ Businesses borrow $$ from bank to build more stores

CVS pays back Bank, Bank pays you (interest)

2/3/14 Class Notes – Savings accounts

• Annual Percentage Yield (APY): • How much interest bank will pay you in one year!• Given as a percentage of your average balance.• Example: APY = 0.2%, Balance = $5,000• Interest earned = (0.002)(5,000) = $10

• Interest rates can be fixed or variable• Fixed = rate stays the same• Variable = rate fluctuates

2/3/14To- Do:

• Research 2 different savings accounts

• Based on your research, which bank would you choose to open accounts in & why?