Topic 16 · finance
Savings and Accumulation
Savings are money set aside for the future and for trouble; they give calm and freedom of choice.
Emergency fund
An emergency fund is a reserve of 3–6 months of expenses in case income is lost. Keep it accessible and safe.
Where to keep and grow it
A bank deposit earns interest and gives protection (deposit insurance). Securities — shares and bonds — can earn more, but with risk.
Compound interest
Interest is charged on the interest already earned too — over time savings grow faster and faster. The earlier you start, the stronger the effect.
🎯 Now possible
- explain the role of an emergency fund
- compare a deposit with securities
- understand the effect of compound interest
Cheat sheet
Fund = 3–6 months of expenses
Deposit — interest plus deposit insurance
Shares and bonds earn more but riskier
Compound interest: start earlier → grow more