Glossary

Here is a list of words you may find helpful when reading about saving:

Fixed-term account: This is a savings account set up for a specific amount of time to earn interest at a faster rate than a regular savings account.

Interest: You either earn or pay interest. If you keep your money in a savings account, you earn interest on it. If you borrow money, you pay interest on it.

Maturity: the date when your money gets paid back.

Mutual Fund: Mutual funds are a big pool of money from many investors. This money gets invested in many different company stocks. One advantage to mutual funds is that having your money diversified, or spread among many companies, protects your money from changes in individual stock prices. One stock may go down in your mutual fund, but another might go up. You usually have to make a minimum investment, but it depends on the fund.

Principal: the amount of money you put into an account

Rate of Return: the amount of money you earn over a period of time

Savings Account: A bank account used to hold your money. The bank pays you interest, or a percentage, on the money you keep in the bank. You don’t make much money by keeping your money in a regular savings account. But the good part is that your account is safe, you can keep as much money as you want and it is easy to take out.