Shopping for a Savings Plan

Learning Objective: use online services to find the appropriate savings vehicles

1. The Spencers are looking to save money for their children's college tuition. They do not want to take any risk with their money and will only save the money with a bank. They know ahead of time when they will need the money and don't anticipate ever withdrawing it early.

What type of savings tool would you recommend? Why?

CD's?

If they save this money in $1,000 increments, find the 10 year rate for this investment. Also, include the financial institution that is making this offer.

1,000

2. The Browns are saving for the down payment on a house. Since they have not picked out a house yet, they are not sure how much they need to save. They are hoping to buy a foreclosure and intend to start looking in a couple of months--closer to the end of their current lease. It is important for them that they can quickly take their money out of any investment.

What type of savings tool would you recommend? Why?

They have $10,000 to invest right now. Find a savings tool with a minimum investment at or below this level. Also, include the financial institution that is making this offer and include any other applicable details.

3. The Joneses have some money set aside for emergencies. They would like to earn more interest on it, but require immediate access to it at all times. They would also like to invest in something that is not FDIC insured in order to make more money by taking more risk. They do not want to invest in stocks, bonds, or funds that are composed of stocks or bonds.

What type of savings tool would you recommend? Why?

The Joneses have $50,000 to invest right now. Find a savings tool with a minimum investment at or below this level. Also, include the financial institution that is making this offer and include any other applicable details.

4. The Millers have some money currently in an interest-bearing checking account. They have significant income from their investments and would like to move this money to a tax-exempt savings vehicle.

What type of savings tool would you recommend? Why?

The Millers have $100,000 to invest. Find a savings tool with a minimum investment at or below this level. Also, include the financial institution that is making this offer and include any other applicable details.

5. The Davis family has some money that is currently in shoe boxes in their attic. Recently, they learned about how inflation continually destroys the purchasing power of each dollar over time. They would like to move this money to a savings vehicle that will pay them more when inflation is higher.

What type of savings tool would you recommend? Why?

After counting all the money the found in their attic they have $6,700 to invest. Find a savings tool with a minimum investment at or below this level. Also, include the financial institution that is making this offer and include any other applicable details.

6. A number of banks and credit unions offer really high introductory rates for new customers. Find one of these offers and describe it below. Be sure to include the institution's name and the specific offer.