Ch 7- Super Saving

Question 1

Reasons to save?

Answer 1

-You can earn interest
-Retirement fund
-Child education
-Credit rating (some banks only provide loans if they know you save frequently)
-Protect against financial emergencies

Question 2

Where to save money

Answer 2

At home (Risky)
Financial institution (Banks)
Credit Union or building societies
The post office

Question 3

What is a credit union?

Answer 3

an independent, not-for-profit organisation that exists solely for the benefit of its members, not stock markets

Question 4

Advantages of having saving in a financial institution?

Answer 4

-Safe (Deposit Guarantee Scheme)
-Earn interest
-Convenient
-Loan approval is easier

Question 5

What is the Deposit Guarantee Scheme?

Answer 5

Guarantees that if a financial institution fails, each saver will get back their money up to a certain limit

Question 6

Saving products available with banks and building societies?

Answer 6

-Instant access Savings Account (Lower rates of interest)

-Regular Saver Account (Saver must save a regular minimum amount to receive full interest)

-Notice Savings Account (Must give notice before withdrawing money, higher interest)

-Fixed-term Savings Account (Savings must be kept for a minimum amount of time, higher interest but will lose interest if you withdraw money early)

Question 7

Saving products available with credit unions?

Answer 7

-Similar accounts to banks
-Share Accounts (pay savers a share of the profit earned by the credit union)

Question 8

Saving products available with An Post?

Answer 8

-All savings have tax-free interest
-All savings have unlimited State guarantee that your money will be repaid
-Regular instalments saving accounts

Question 9

What is investing?

Answer 9

Putting your money into shares, property, insurance policies and other potentially risky activities in the hope that you will earn more money than a regular savings account

Question 10

What are 3 ways to invest?

Answer 10

-Stock market (Selling shares)
-Property market (rent out not used property, or resale at higher amounts)
-Insurance companies (Endowment life assurance policies are a form of investment)

Question 11

What is AER percentage?

Answer 11

Annual Equivalent Rate
-Represents the true rate of interest on savings