| A | B |
|---|
| savings | setting aside money for future use. |
| investing | committing money for the purpose of mkaing a profit over time. |
| savings plan | a step-by-step approach for putting money aside in savings. |
| discretionary income | amount of available income after taxes and necessary spending for food, clothing, and shelter. |
| Simple interest | interest calcuated only on the money you've deposited, not on prior interest earned. |
| Compound interest | interest calcuated on both deposits made an dprior interest earned. |
| Annual Percetage Yield (APY) | Actual annual rate at which interest is earned including the effects of compounding. |
| Liquidity | The ease with which savings or investments can be turned into cash to be spent. |
| Term | A period of time during which money must be kept on deposit. |
| Certificate of Deposit (CD) | A certificate issued by a financial i nstitutioon to indicate that money has been deposited for a certain term. |
| Savings Bond | nontransferable debt certificates issued by the U.S. Treasurey. |
