MBF3C – FinanceDate: ______

Banking – Savings & Chequing

Banks and other financial institutions offer many different investment alternatives – ways for you to access, save and grow your money.

A LITTLE BIT ABOUT BANKS

  • Banks provide a ______place to ______
  • Banks might pay you ______( a ______of what you have in the bank)

Banks ______your money to make more money.

  • Banks charge ______for ______you make

Examples include:

-

-

-

-

  • Unless you have a large sum of money in the bank, you usually pay the bank______than the bank pays you ______

Things to consider when looking for an investment product:

  1. Features – what purpose will the product serve?
  2. Cost – what fees are associated with the product?
  3. Risk – how secure is your money?
  4. Growth – how quickly will your money grow?

CHEQUING VS SAVINGS ACCOUNTS

CHEQUING ACCOUNT

Compare the various chequing and savings accounts offered by TD Canada Trust. Review the information provided for each product and answer the questions that follow.

What is the purpose of a chequing account?

Why do you suppose the monthly fees are different for each account?

What interest rate is offered on chequing accounts?

Suppose, on average, you make the following monthly transactions. Which chequing account would be best suited for your spending habits? Assume you maintain a minimum monthly balance of $800.

5 TD ATM Cash withdrawals20 debit card purchases3 bill payments

1 non TD ATM withdrawal2 paycheque deposits1 cheque written

(Deposits are not included in transaction fees)

Activity / All-inclusive / Unlimited / Every Day
Monthly Fee
+
30 Transactions
+
1 non-TD ATM
Cash Withdrawal
TOTAL

SAVINGS ACCOUNT

Review and compare the savings accounts offered by TD Canada Trust and answer the questions.

What is the purpose of a savings account?

Is there a monthly fee associated with a savings account?

Why do you suppose the debit transaction fees are so high?

EXAMPLE: What would be the service charge for each of the accounts above if, in one month, you had the following transactions?

2 TD ATM cash withdrawals 3 debit purchases1 Interac ATM withdrawals

Balance / Everyday Savings / High Interest Savings / Youth Account
__ Transactions
+
__ Interac Fee
TOTAL

Banking – Savings & Chequing Practice

Month / Number of Transactions / Transaction Fee
January / 18 / 18 – 10 = 80.85 x 8 = $6.80
$4.95 + $6.80 = $11.75
February / 8
March / 14
April / 21
May / 17
  1. Jeremy's bank charges him $4.95 per month for up to 10 transactions, plus 85¢ for each additional transaction. The table shows the number of transactions Jeremy made each month for five months. Determine the total transaction fee Jeremy paid each month.
  1. MATCH each of the following banking scenarios with the most appropriate account option.

A)Barika typically uses an automated bank machine four times a week to withdraw cash. Her rent, hydro, phone bill, and car payment are automatically deducted from her account each month. / Option 1:$11.25 per month for the first 10 transactions, plus $1.25 for each additional transaction
B)Abbas usually makes one weekly cash withdrawal and eight automatic bill payments each month. / Option 2: $16.75 per month for the first 15 transactions, plus 85¢ for each additional transaction
C)Heather does not carry cash. She uses her debit card to pay for everything. / Option 3: $21.50 per month for an unlimited number of transactions
  1. George plans to invest 50% of his tax return in a daily interest savings account (interest is compounded daily) that pays 2.4% per year. This year, Mohan's tax return is $1500.
    How much will his investment be worth at the end of 5 years? Recall:
  1. Mathieu and his twin sister Lizette are each given $3000 for their 16th birthday. They both decide to invest the money until their 19th birthday. Mathieu invests in a daily interest savings plan that pays 1.8% per year. Lizette invests in a plan that pays 2.4% per year, compounded monthly. Which twin's investment will be worth more on their 19th birthday? How much more?

Page 1 of 5