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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