Saving Money
Where you save your money often depends on what you are saving for.If you are saving to buy a dictionary or to go to a concert,then probably keep your money somewhere in your room.
If you are saving for a big purchase like a mountain bike or a school trip, where would you save your money?
One place to save money is the bank.Putting your money in a savings account will help your money earn more money.If you put your money in a piggy bank,one year later youll still have the same amount of money you put in.If you put your money in a savings account,one year later,youll have more money than you put in.Why?When you keep your money in a bank,your money earns interest.Interest is the amount of money a bank pays you to use your money. The bank uses your moneyto loan money to people and businesses.
The bank will send you a statement several times a year.A bank statement tells you how much money there is in your account,It also tells you how much interest you have earned.If you leave your money in the bank,you can watch it grow!
Another way you can save money is to buy a certificate of deposit or CD. If you have some money that you dont need to use for a long time,this is a good way to make your money grow.
You can buy a CD at a bank.You agree not to use the money for a certain period of time.That period might be from six months to five years You cant touch your money during that time.If you do,you must pay a penalty,or fee.
Since the bank is using your money for that time period,it will pay you interest.You will earn more interest with a CD than in a savings account.Can you guess why? Its because you promise to leave your money in the bank for a certain period of time. Banks pay different rates of interest. So, you may want to compare rates in newspaper ads before buying a CD.
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