Chapter 10 - Saving and Investing

Question 1

Define investing.

Answer 1

Using our money to earn a greater return than is possible from an ordinary savings account.

Question 2

Define EBS.

Answer 2

Educational Building Society.

Question 3

Define credit union.

Answer 3

A non-profit making cooperative organisation [established based on address e.g. Ballybrack Credit Union or place of work e.g. An Post Employees Credit Union] where people save regularly and lend to each other at fair rates of interest.

Question 4

Define postal money order.

Answer 4

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

Question 5

Define simple interest.

Answer 5

Interest is a percentage of the money put into the account originally.

Question 6

Define 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

Define CAR.

Answer 7

Compound Annual Rated. 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

List the types of financial institutions.

Answer 8

1. Commercial Bank
2. An Post
3. Credit Union
4. Building Society

Question 9

List the reasons for saving.

Answer 9

1. To have money available to purchase something in the future e.g. a holiday
2. To have money for unexpected bills e.g. replace broken wasting machine
3. To have money for a child’s education
4. To provide income for when they retire

Question 10

Name two factors that should be considered when deciding where to save money.

Answer 10

1. Return on Investment - What rate of interest can we get on savings
2. Convenience - Which financial institution has the most convenient opening hours/location

Question 11

Name two factors that should be considered before investing.

Answer 11

1. Return - How much money could we make on our investment

2. Risk - Is there any risk with this investment, could we lose our money

Question 12

List three ways or places to invest.

Answer 12

1. Investment accounts
2. Buying shares in companies
3. Buying property

Question 13

Name the two types of Credit Union accounts.

Answer 13

1. Credit Union Savings (Share Account) - Dividend paid at the end of the year
2. Credit Union Deposit Account - Interest paid on savings

Question 14

List three services offered by An Post.

Answer 14

1. Sale of stamps/postal products
2. Mobile phone top up
3. Saving schemes

Question 15

Define savings.

Answer 15

The part of our income we do not spend.

Question 16

Name three ways to save with An Post.

Answer 16

1. Savings Bonds (must hold for 3 year period, receive 10% interest, no DIRT, no charges and fees)
2. Savings Certificates (must hold for 5 years six months, receive 21% interest, no DIRT, no charges and fees)
3. Deposit Account (similar to deposit account from commercial bank)