Savings and Investing Before you consider the best way to save or invest your money, it’s important to understand the language of saving and investment. Familiarize yourself with the definitions of the following terms. bond stock interest dividend savings account common stock capital gain preferred stock mutual fund time deposit
The first step is to inquire at a financial institution the process of setting up a savings account or investment account. On a separate sheet of paper, typed, and double-spaced write a report on how one would open a checking account. Be detailed in you description. Start with who, the person’s position, who you dealt with to open the account. What are the requirements to open an account? Must you maintain a certain level of balance? Do you have access to ATMs, other than the financial institutions? Are there fees? If so, what are they? These are only some of the questions you need to ask. Listen carefully, take notes, and be thorough. On the same page as your report, answer the following questions. 1. What is one advantage of keeping your money in a savings account? What is a disadvantage of doing so? 2. Which of the following is considered a time deposit? a. Money market account b. Certificate of deposit c. Mutual fund 3. How are bonds and stock similar? How are they different? 4. What is the difference between a dividend and a capital gain? 5. What is the difference between preferred stock and common stock? 6. What is one advantage of investing in stocks? What is a disadvantage of doing so?