Savings Account

• an interest bearing deposit account held at a bank/financial initiation.   * typically: pay modest interest rate   * safe/reliable   * great for parking cash available for short term

• Limitations on now often you can withdraw   * Ideal For emergency fund   * Short term-goals (baying a car, vacation)   * more surplus cash you don't need in your checking account: get more interest

• How do they work   * sources of funds of financial institutions for loans   * interest rates vary   * some require a minimum   * The more competitive the rate the more it will fluctuate   * balance in order to avoid monthly fees.   * Earn highest published rate , others have none (balance requirement)

• Advantages   * Places to put your money that is separated from everyday banking needs.   * rainy day / earmark funds to achieve a big saving goal   * Security - Federal Deposit Insurance Corporation (FDIC).   * saving accounts earn money   * impose hefty penalties if you withdraw your funds too early.   * at the same installation as primary (access very liquid: hard to get the cash)   * Checking accounts often has convenience and efficient benefits.     * transfer between accounts.     * more than one savings account

• Disadvantages   * doesn't save like other saving accounts   * higher news with certificates of deposit/treasury bills   * invest in stock |bonds.   * Liquid: key benefits / downsides   * may tempt you to spend money you have saved   * More difficult to cash in bonds

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