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Unit 7 Notes Kim V - Unit 7 Personal & Family Finance What...

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Unit 7Personal & Family FinanceWhat is a financial goal that you have? How will you reach this goal?
Savings;As we discussed in Unit 4, there are a number of different types of financial institutions that offersavings accounts. Savings accounts can be very useful in successful financial management.Savings account;is an account that earns interest on the amount deposited, but the funds cannotbe directly accessed (such as by writing a check). However, savings accounts are generallythought of as liquid accounts, since you are able to withdraw the money at any time. Thus,savings accounts offer a place for individuals to accumulate or save money, earning some intereston this amount until the time that the person needs his or her money.One of the advantages of having a savings account is that the money can be used for emergencypurposes, whereas money in bonds, CDs, or investments may not be readily available. For example, youmight experience a car problem that will cost several hundred dollars. A savings account allows you toplan for these situations and have money to take care of them. Savings accounts also allow individuals toset aside money for specific purposes. For example, some individuals may set aside money each monthinto a savings account for vacations or toward a specific purpose, such as the down payment on a house.When comparing savings accounts at different financial institutions, there are several factors thatyou'll want to consider. First, find out the regulations and fees on the account. Some savings accountsmay require that you keep a minimum balance in the account to avoid a fee. Choose an account that hasregulations that fit your current needs. Second, compare the interest rates on the savings account. The rateof return is the "percentage of increase in the value of your savings from earned interest". If your rate ofreturn is 5 percent and you have $1,000 in a savings account, you will earn $50 in interest over the courseof one year.

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Term
Spring
Professor
YatinN.Bhagwat(P)

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