Word bank: accounts · compounding · emergencies · yourself

1. Savings is for money with a job later — goals and .
2. APY tells you what you'll earn in a year, including .
3. Rates vary a lot between . Compare, and check for fees and minimums.
4. Automate it: pay first on payday.

1. You're saving $800 for a laptop you plan to buy in 8 months.

   1. Where does this money most sensibly belong?

   • A. In checking, so it's easy to reach
   • B. Invested in a single stock so it grows faster
   • C. In a savings account, separate from spending money
   • D. As cash in a drawer at home

2. 2. At a 4.00% APY, $1,000 earns about 8 times as much in a year as it would at a 0.50% APY.

   True/False

3. Every payday, $25 moves automatically from checking to savings before you have a chance to spend it.

   3. Why does this strategy work so well?

   • A. Saving happens before spending decisions, so it doesn't rely on willpower.
   • B. Automatic transfers earn a higher interest rate.
   • C. It protects you from all bank fees.
   • D. It's required by law for savings accounts.

1. 1. You keep $800 in an account paying 4% APY for one year. About how much interest do you earn?

2. 2. Account X pays 0.5% APY and Account Y pays 4.5% APY. With $2,000 for one year, how much more does Y earn?

1. 1. Why do you think some banks pay much higher savings rates than others?

2. 2. What's one savings goal you could automate this year?