Chapter 5 - Chapter 5 Managing Checking and Savings...

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Unformatted text preview: Chapter 5 Managing Checking and Savings Accounts How you handle all your monetary assets including cash, checking accounts, savings accounts, certificates of deposit, and money market accounts. The goal is to maximize earnings while minimizing fees. Monetary Asset Management 3 Tools of Monetary Asset Management 1. Low-cost (no-cost) checking account 2. Interest-earning savings account 3. Money market account Liquidity Liquidity is the speed and ease with which assets can be converted to cash. Depository Institutions Commercial Banks Savings Banks Mutual Savings Banks Credit Unions Selecting Your Depository Institution Convenience Products Service Charges Personal Relationships Tool 1 Checking Account Service Charges Interest Minimum Balance Average Balance Tool 2 Savings Account Statement Savings Certificate of Deposit How to Save Interest Tool 3 Money Market Account Super NOW Account Money Market Deposit Account Money Market Mutual Funds Asset Management Accounts Annual Percentage Yield The Truth in Savings Act of 1991 requires depository institutions to quote yields rather than rates. The APY allows you to compare institutions and compound interest by varying methods as APY takes compounding into consideration. Electronic Money Management ATM Cards/Debit Cards Point of Sale Terminals Smart Cards/Stored-Value Cards Electronic Benefits Transfer Cards Electronic Transfers Direct Deposit Preauthorized Payments Fixing Errors Notify in writing Provisional credit You are entitled to copies Keep your documentation Money Management Psychology Money is connected to strong emotions Learn to manage financial disagreements Use positive "I" statements Be honest Talk regularly ...
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