Savings

1
Savings
Cents make Euros
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2
Aim of the Lesson

• To help students understand what savings are, the
  necessity of savings in certain situations,
  different kinds of savings, the advantages of
  savings and saving for a pension.

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3
What are savings?

• Saving occur when people do not spend all their
  income?
• This can be done deliberately or just happen.

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Why do people save?

• Because they have too much income.
• In case of emergencies. For example health
  problems.
• For something in the future. For example their
  childrens education.
• For something that they really need, but cannot
  afford at the moment and they know to buy the
  item using credit is too expensive.

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What can people do with their savings?

• Put it under the bed and hope the thief does not
  visit.
• Put in a current account. Problem no interest and
  the bank will charge them a fee for looking after
  it.
• Put it in a deposit account. Interest, but will
  the interest rate be as high as the inflation
  rate in the country or will their money loose
  its real buying power.

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Instalment Savings

• Here the saver puts in a certain amount every
  week or every month for an agreed period.

I save a regular amount and my piggy gets fatter
and fatter.
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Interest

• Most banks pay you for the privilege of having
  your money provided it is in a deposit account.
  This is known as interest.
• Fixed interest means the rate of interest is
  agreed for a period in advance and even if the
  normal interest rates that most banks are giving
  goes up or down the interest rate this saver gets
  are fixed.
• Variable interest rates change and can go up or
  down.

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DIRT (Deposit Interest Retention Tax)

• This is the tax collected by the government on
  interest earned on money invested in financial
  institutions.
• It is collected by the financial institution so
  the saver never gets it.

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9
Post Office Savings
Click here to learn about saving schemes offered
by An Post
http//www.anpost.ie/AnPost/MainContent/PersonalC
ustomers/MoneyMatters/SavingsandInvestments/
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Security of Capital

• Most customers will be concerned that the money,
  they invested known as their Capital will be
  secure.

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How quick can you get access to your money?

• The longer a saver agrees to give their money to
  the bank the greater the interest.
• If the money is on demand, meaning the saver can
  go an ask for it any day, the interest rate will
  be low.

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Larger the amount of money

• Some banks offer a greater rate of interest if
  the amount lodged is a large amount.

I have very little money, so banks will give me a
lower rate of interest.
I am a millioner, so I have lots of money to give
the bank and they will give me loads of interest.
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13
Benefits of savings to the country

• Without savings banks would have no money to lend
  to people, who want to borrow.
• Less jobs as large businesses would not be able
  to borrow to build factories etc.

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To open an account in Ireland at the moment you
need

• Current Photo Id (For example passport or
  drivers licence.)
• Proof of residence (For example an ESB bill.)
• Why do you think these are necessary to open an
  account?

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15
Pensions

• When people save for their old age, they are
  saving for their pension.
• The government encourages this because if people
  have enough money to pay for their expenses in
  old age, the government will not have to help
  them.
• The earlier one starts to save for a pension the
  better, as the more they will have and the
  pension company will have had the money for
  longer and hence will have been able to make more
  money with it.

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Contributory Pensions

• In Ireland at the moment the governmemt will only
  give a pensuion
• You may qualify for the Old Age Non-Contributory
  Pension

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Old Age Non-contributory Pension

• In Ireland at the moment the government will only
  give one a non contributory pension if
• You are aged 66 or over.
• You do not qualify for an Old Age Contributory
  Pension.
• When a means test is done on your present income
  and the value of property you have you are below
  a certain level.

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18
Savings
The End
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