Chapter 10~Saving And Investing

Question 1

Investing?

Answer 1

Using our money to earn a greater return then is possible from an ordinary saving amount

Question 2

ESB?

Answer 2

Educational building society

Question 3

Credit union?

Answer 3

A non-profit making co-operative organisation where people save regularly and lend to each other at fair rates of interest

Question 4

Postal money order?

Answer 4

An order from one post office to another to pay a sum of money to the person named on the order

Question 5

Simple interest?

Answer 5

Interest is a percentage of the money put into the account

Question 6

Compound interest?

Answer 6

Interest is calculated as a percentage of the total amount in the account at the end of each year

Question 7

CAR?

Answer 7

Compound annual rate. Actual/true rate of interest you are receiving on your savings/investment with a financial institution. It takes into account any fees charged and the number of years you must hold the investment

Question 8

4 types of financial institutions

Answer 8

• commercial bank
• an post
• credit union
• building society

Question 9

3 reasons for saving

Answer 9

• to have money for children’s education
• to pay for something in the future e.g holiday
• to have money for when they retire

Question 10

2 considerations when deciding where to save money

Answer 10

• return on investment: what rate of interest can we get on savings
• convenience: which financial institution has the most convenient opening hours

Question 11

2 Factors to consider before investing

Answer 11

• return- how much can we make on our investment

* risk- it there a risk with this investment

Question 12

3 ways to invest

Answer 12

• investment accounts
• shares in companies
• property

Question 13

2 Advantages of saving with a building society

Answer 13

• pay a good rate of interest on savings

* longer opening hours than the commercial banks

Question 14

2 disadvantages of a building society

Answer 14

• DIRT must be paid on the interest earned on savings

* may have to give a certain number of days notice when making a large withdrawal

Question 15

2 Advantages of saving with a credit union

Answer 15

• interest rate on loans is very low

* flexible opening hours

Question 16

2 Disadvantages of saving with a credit union

Answer 16

• amount you can borrow relates to the amount you have saved
• don’t offer the same range of services as commercial banks

Question 17

Types of credit union accounts

Answer 17

• credit union savings(share account) -dividend paid at the end of the year
• credit union deposit account -interest paid on savings

Question 18

3 services offered by an post

Answer 18

• passport express
• prize bonds
• mobile phone to up

Question 19

2 ways to save with an post

Answer 19

• Savings bonds (3yr period, receive 10% interest, no DIRT, no changes & fees)
• Saving Certificates (5yr 6months, relieve 21% interest, no DIRT, no charges & fees)

Question 20

Saving?

Answer 20

The part of our income we do not spend

Question 21

Dividend?

Answer 21

Money paid out by a company, to its share holders out of its profits