6 - mel3e and mel4e



Unit 4 – Lesson 3: Types of Savings

There are different ways of investing and saving your money at a bank. Each has its own advantages and disadvantages.

1. Savings Accounts

• You simply _______________ your money at the bank, and they give you ____________ on your money.

• Usually there is no monthly charge

• BUT there are usually transaction _________

• You can withdrawal your money anytime

• The interest rate is __________ than a checking account

• There is ________________involved

2. GIC (Guaranteed Investment Certificate)

• You go into the bank and purchase these

• You _______ keep it for a certain length of time (usually a 6 month minimum) until it matures. If you cash it in before this time, you lose your interest

• The interest rate is ___________ ____________ than a savings account

• There is ______________ involved

3. Mutual Funds

• These are collections of stocks that trade on the ____________ market.

• You give your money to a ________________ (usually through an investment advisor), who buys the funds.

• There is a risk here, because if the stocks do not do well you can __________ your money.

• You can withdrawal the funds at ______________.

4. RRSP (Registered Retirement Savings Plan)

• A plan to which people may contribute funds for their _______________.

• It is administered by a company who invest the money in stocks, real estate, mutual funds, etc.

• There is risk involved here also, but because the places the money is invested is more diverse, the risk is ___________ than for mutual funds.

• Contributions are tax deductible (you don’t pay income tax on them)

• Interest (profit) is tax free

• You cannot access the money until you retire.

PRACTICE: Try questions 1-6 on page 110 and 111 of the textbook.

*We will take up some answers as a class after everyone has had a chance to complete the work.

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