Tag: savings

Savings Account definition explanation

What is Savings Account?
A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate. Depending on the specific type of savings account, the account holder may not be able to write checks from the account (without incurring extra fees or expenses) and the account is likely to have a limited number of free transfers/transactions. Savings account funds are considered one of the most liquid investments outside of demand accounts and cash. Read more for examples and further explanation including related video clips and also comments
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Emergency Banking Act Of 1933 definition explanation

What is Emergency Banking Act Of 1933?
A bill passed during the administration of former U.S. President Franklin D. Roosevelt in reaction to the financially adverse conditions of the Great Depression. The measure, which called for a four-day mandatory shutdown of U.S. banks for inspections before they could be reopened, sought to re-instill investor confidence and stability in the banking system. Read more for examples and further explanation including related video clips and also comments
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Simple Interest Bi-Weekly Mortgage definition explanation

What is Simple Interest Bi-Weekly Mortgage?
A bi-weekly mortgage payment plan in which the payments made by the borrower are applied immediately toward the remaining principal balance of the mortgage as they are received. This differs from a traditional bi-weekly plan, where the first payment received during a month is held by the servicer of the mortgage until the second payment for that month is received; only then is the sum of the two payments is applied toward the remaining principal balance of the mortgage. Read more for examples and further explanation including related video clips and also comments
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Individual Retirement Account – IRA definition explanation

What is Individual Retirement Account – IRA?
An investing tool used by individuals to earn and earmark funds for retirement savings. There are several types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs.

Traditional and Roth IRAs are established by individual taxpayers, who are allowed to contribute 100% of compensation (self-employment income for sole proprietors and partners) up to a set maximum dollar amount. Contributions to the Traditional IRA may be tax deductible depending on the taxpayer’s income, tax filing status and coverage by an employer-sponsored retirement plan. Roth IRA contributions are not tax-deductible.

SEPs and SIMPLEs are retirement plans established by employers. Individual participant contributions are made to SEP IRAs and SIMPLE IRAs.

Also referred to as “”individual retirement arrangements.”” Read more for examples and further explanation including related video clips and also comments
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Archer MSA definition explanation

What is Archer MSA?
A savings account that earns tax deductible interest for medical expenses. Archer MSAs are often used by small business or self-employed individuals as a way to pay for healthcare services to employees. This type of account gets its name from Bill Archer, the congressman who helped create the MSA by sponsoring its amendment. Read more for examples and further explanation including related video clips and also comments
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Whole Life Insurance Policy definition explanation

What is Whole Life Insurance Policy?
A life insurance contract with level premiums that has both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against. Read more for examples and further explanation including related video clips and also comments
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Annuitization Method definition explanation

What is Annuitization Method?
A type of annuity distribution structure that gives the annuitant periodic income payments for the rest of his or her life, or a specified period of time. This is different than the systematic withdrawal method, with which the annuitant chooses the amount he or she would like to receive each month, which he or she receives until the amount in the account runs out. Read more for examples and further explanation including related video clips and also comments
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Cumulative Interest definition explanation

What is Cumulative Interest?
The sum of all interest payments made on a loan over a certain time period. On an amortizing loan, cumulative interest will increase at a decreasing rate, as each subsequent periodic payment on the loan is a higher percentage principal and a lower percentage interest. Read more for examples and further explanation including related video clips and also comments
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