Savings Account

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What is a savings account?

Back

A savings account is a deposit account held at a financial institution that provides a modest interest rate. It is designed for saving money rather than for daily transactions.

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What is the main advantage of a money market account over a regular savings account?

Back

Higher interest rates.

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Can you write checks from a savings account?

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No.

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What is a Certificate of Deposit (CD)?

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A CD is a time deposit account that requires you to leave your money for a fixed period of time in exchange for a higher interest rate.

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What does APY stand for?

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Annual Percentage Yield, which reflects the total amount of interest earned on an account based on the interest rate and the frequency of compounding.

Tags

CCSS.7.RP.A.3

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What is the primary purpose of a checking account?

Back

A checking account is primarily used for everyday transactions, allowing for deposits and withdrawals.

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What is compound interest?

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Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Tags

CCSS.7.RP.A.3

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What is the difference between simple interest and compound interest?

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Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest that has already been added.

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CCSS.7.RP.A.3

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What is the typical interest rate range for savings accounts?

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Typically, savings account interest rates range from 0.01% to 0.50%, depending on the financial institution.

Tags

CCSS.7.RP.A.3

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What is liquidity in terms of savings accounts?

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Liquidity refers to how easily and quickly you can access your money in a savings account without penalties.