saving and investing 🏇🏿 Flashcards
where can we save ?
As well as commericial banks, you can also save money in a building society,the credit union and An Post.
What factors should be considered when finding a place to save
🍄What rate of intersest can we get on our savings from different finia al insitiutions?
🍄Can we withdraw our money at any time or do we have to keep in there for a certain amount of time.?
🍄Whic h finanicail insitution has the most convient opening hours?
🍄What extra benefits can we get for saving our money in one particular insitution , e.g. a free mobile phone,fresw banking or a €10 gift for opening a new savings account
what are some reasons for saving
🍄to have money aviable to purchase something in the future, e.g. a holiday or a new car
🍄to have money aviable for unexpected bills, e.g. to replace a dishwasher if it breaks down .
🍄to have money aviable for our children’s education or family weddings
🍄to provide an income for ourselves when we retire
What is investing
Investing means using our savings in such a way that we earn a lot more than the interest we would be getting in an ordinary savings account.Examples include:
- Investing accounts which pay higher rate of interest than a normal account.
- Buying shares in companies which pay us a dividend each year or which increase the value.
- Buying property which will pa rent and which may increase in value
What are the factors to consider before investing
- How much money could we possible make out of this?
- Is there any risk with this investment?For example, with some investments we could lose our money-are we prepared to take this risk?
- How easy is it to turn our investment back to money
- Will we have to pay tax on the extra money we earn on the investment?
- What is the minimum amount we can invest can we afford this
- What do we want to get from our investment?Some investments will pay us regularly income, while other investments might only pay out when we sell the investment again
What is a building society
A building society is a financial institution that provides a wide range of banking services to their customers.In particular, building societies specialise in the lending of money to help their customers to buy their home.The Educational Building Society (EBS) is the biggest building society in Ireland
What are the advantages in saving with a building society
- They offer a wide range of banking and financial services,including current(chequebook) and savings accounts and personal loans, ATMs, credit cards, investments and insurance
- They usually pay a good rate of interest on their savings
- Building societies have many branches all around the country
- They have longer opening hours than commercial banks
What are the disadvantages of saving with a building society
- Tax (DIRT) must be paid on the interest earned on savings
* You may have a number of days’ notice to the building society before you want to make a large withdraw
What is a credit union
Credit unions is a non-profit making co-operative organisation where people save regularly and lend to each other at fair rates of interest.The regular savings put in by the members form a pool of money which is then used to give loans to other members.The interest rates are lower because the credit union is using the members money to lend to other members rather than borrowing money from outside
Advantages of saving with a credit union
- Credit unions are located in convenient locations in all main cities and towns
- Credit unions have flexible opening hours to suit their members
- The interest rate on loans are very low
- Some of the employees are volunteers, which help to keep running costs down
- Tax (DIRT) is not deducted by the credit union from interest you receive on your savings
What are the disadvantages of being part of a credit union
- The amount you can borrow from the credit union is related to how much you have saved with them
- Credit unions do not offer the same range of services as commercial banks
How does one become part of the credit union
Anyone can be part of the a credit union provided they share a common bond.It usually one or more of the following
- Where they live
- Where they work
- An association the are all part of
What two types of savings accounts can you have with a credit union
The credit union savings (share) account
The credit union deposit account
What is a credit union savings (shares) account
This is an ordinary account where you lodge in money any time you wish.At the end of the year you might receive an extra bit of money called a dividend depending on how much you have saved
What is a credit union deposit account
Credit unions also offer deposit accounts, which operate the same way of those offered by commercial banks
