Banking E 1 Savings Accounts Savings Accounts Savings

Banking E 1 Savings Accounts

Savings Accounts Savings Account – Accounts maintained by retail financial institutions that pay ______ interest but cannot be used as a means of exchanging money. For example: you can ______ not write a check for money in a savings account • A way to safely set aside (accumulate) money and _____ money at the same time earn • Interest ____ rates can be compounded on a daily, weekly, monthly, or annual basis • Most savings accounts require a _____ minimum opening deposit • Most savings account will charge a ________ maintenance fee if the amount of money in the account drops below a ______ minimum balance

Savings Accounts Types of Savings Accounts • Every bank offers _____ choices for customers opening a savings account. However, customers need read all the conditions carefully to choose the best one for them. ______ Example: First Niagara Savings Accounts $1000 $5000 $400 and a checking account $5 $25 $4

Savings Accounts Example: First Niagara Savings Accounts $1000 $5000 $400 and a checking account $5 $25 $4 Calculating Interest Formula: y= A(1 + r)t Calculate the interest earned for 1 month based on the following information A. $5000 at 0. 05% B. $5000 at 0. 10% 1 1 y = 5000( 1 + 0. 0005) y = 5000( 1 + 0. 001 ) 5002. 5 – 5000 = 2. 50 5005 – 5000 = 5. 00 2. 50 ÷ 12 = 0. 208… ≈ 0. 21 5. 00 ÷ 12 = 0. 416… ≈ 0. 42

Savings Accounts Example: First Niagara Savings Accounts $1000 $5000 $400 and a checking account $5 $25 $4 Calculating Interest Formula: y= A(1 + r)t Calculate the interest earned for 1 month based on the following information C. $5000 at 0. 20% 1 y = 5000( 1 + 0. 002) 5010 – 5000 = 10. 00 ÷ 12 = 0. 833… ≈ 0. 83

Savings Accounts Depositing Money • Money can be _______ direct deposited into a savings account. This is when an employee chooses to have all or a portion of their paycheck deposited electronically _____ into their savings account. • Cash and checks can be deposited into a savings account using a ____ deposit slip.

Savings Accounts • First line is for _____ cash • Next lines are used for _____ checks • Subtotal and Less Cash Received is for when you are Account Number: 201 -3865249 -3 only depositing checks and want some of the money in cash _______ • Last line is the ______ total January 5, 2016 Your Name 2013865 2493 175. 5 0 65. 0 0 240. 5 0 20. 0 0 2 2 0 5 0

Savings Accounts Withdrawing Money between • Money can be electronically transferred _____ accounts. For example, money can be transferred _____ out of a savings account into a checking or other account ATM cards that can be used to • Some banks offer ______ withdraw money Be careful There are usually fees associated with ATM usage

Savings Accounts Withdrawing Money • Money can also be withdrawn using a ______ withdrawal slip Account Number: 702 -169873 -5 Let’s say you want to withdraw $325 4/29/16 your name Three hundred twenty five and no/100 7 0 2 1 6 9 8 7 3 5 3 2 5. 0 0

Savings Accounts Savings Register • When a person opens a savings account, they are given a _____. register This is a booklet used to record deposits, balance in the account withdrawals, and calculate the _____ Balance from previous page $3562. 70 Deposits: 9/28 Direct Deposit $25. 00 Withdrawals: 9/25 ATM withdrawal for dinner and movies $50 9/29 Withdrawal for skateboard $49. 95 9/25 ATM Withdrawal Dinner and movies 9/28 Direct Deposit $50. 00 9/29 Withdrawal Skateboard $49. 95 $25. 00 3562. 70 50. 00 3512. 70 25. 00 3537. 70 49. 95 3487. 75

Savings Accounts Practice Problems