1st Yr- Business

• Risk of a credit union account

  - Very little risks attached as savings are protected by the credit union's own insurance

  
  

  - DIRT is taken away by the credit union before any interest is added to your account

  
  

  - Dividends paid by the credit unions are usually lower than bank interest rates and are only paid if the credit union makes a surplus
• Savings


  Part of your income you don't spend.
• Reasons for saving


  Future wants , Unforeseen events , Future Needs, Retirement, Receive interest
• Future wants


  To purchase something in the future
• Unforeseen events


  To have money available for unexpected expenses such as repairing a broken boiler
• Future needs


  To have money available for a future family expense like college education
• Retirement


  To have extra money for when they retire
• Receiving interest


  Financial institutions will add an amount to savings each year as a reward for saving your money with them. This is called interest.
• Where can you save ?

  You could save your money in commercial banks, An Post and credit unions.
• Reasons for saving your money in financial institutions

  Safety, interest, convenience and loans
• Commercial Banks


  A commercial bank is a financial institution that offers a range of financial services to its customers including deposit accounts for customers who wishes to save money
• Main commercial banks in Ireland

  Bank of Ireland , AIB (Allied Irish Bank) , Permanent TSB, EBS (part of AIB)
• Deposit


  to put money into an account
• Three types of deposit accounts

  Demand , purpose and fixed - term
• Purpose of deposit account

  • Demand account: Allows flexibility in withdrawal and addition of money

  
  

  .• Purpose account: Requires bank notice before withdrawal.

  
  

  • Fixed term account: Ideal for saving and long-term savings, up to 10 years without access.
• Benefits of deposit account

  • Annual interest added based on account balance.

  
  

  • Lowest interest on demand accounts

  
  

  .• No bank charges on deposit accounts.• Government deposit guarantees protect savings.
• Risks of a deposit account

  .Low risk attached.

  
  

  • DIRT (Deposit interest retention tax) removed before account interest.

  
  

  • Bank may charge for withdrawals from notice or term accounts.
• Credit Union


  A co -operative organisation where a group of people save together and lend to each other at low interest rates
• Purpose of a credit union account


  • Ideal for saving and withdrawal flexibility

  
  

  .• Members share common bonds with communities and associations.
• Benefits of a credit union account

  • Savings equal 1 share per €1.

  
  

  • Annual dividends may be received for surplus

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  • No fees or charges on accounts

  
  

  .• Government's Deposit Guarantee Scheme covers savings.
• DIRT


  Deposit Interest Retention Tax
• An Post


  A state - owned company owned by the Government that was set up to provide postal services.
• Purpose of An Post

  • Deposit accounts: Ideal for flexible savings withdrawal and addition

  
  

  .• Fixed Term savings account: Ideal for long-term savings

  
  

  .• Prize Bonds: Ideal for those with extra funds

  
  

  .• Small current accounts: Ideal for those balancing savings and financial activities.
• Benefits of An Post

  • All savings with Post pay interest.

  
  

  • DIRT not reduced from fixed term savings interest.• No fees or charges, seven-day withdrawal without penalty

  
  

  .• Price bonds can be cashed at any time.

  
  

  • All savings guaranteed by the state.
• Risk of An Post


  DIRT is taken away by post for interest is added to your deposit account
• Interest on savings


  The return you receive from a financial institution for saving your money with them
• Interest


  the price paid for the use of borrowed money
• Simple Interest


  interest paid on the principal alone
• How to find simple interest

  Principle x Rate x Time
• AER


  Annual Equivalent Rate
• Compound Interest


  Interest paid on interest previously earned
• Net interest


  the interest paid by business
• Investing


  Using your money (savings) in hope of making a profit
• Examples of investing

  Buying share in companies

  
  

  Buying property

  
  

  Placing your money in an investment fund
• Cryptocurrency


  Digital currency that is not controlled by any central bank and is transferred directly from person to person over the internet like Bitcoin and Ethereum
• Cryptocurrency facts

  • Can be purchased and sold in dollars, euro, etc.

  
  

  • Can be used for goods/services or investment.• Virtually stored in digital wallets

  
  

  .• Value can change rapidly, making it risky.