Saving and

Investment
Ms. Agnes San Isidro
 •Savings-
is setting aside a portion of an

income, earnings, or allowance

at home or in a bank.

 Investment
•is the process of making money grow

and have a return. It is putting money

where it can earn interest for a period

of time.

The Need to Save

Save

and Invest

plan for the

•To have a financial

future. The best way to prepare for

your future is to develop the habit of

saving money.

On the other hand, investing money is a

bit more adventurous than saving

because it entails some risks and, at the

same time, involves in most instances,

bigger amounts of money.

 •Savings accounts in most banks only

give low-interest rates that range from

1% to 2% per year.

•Philippine Deposit Insurance

Corporation (PDIC)- is a government

institution created in 1963 to provide

insurance coverage to all bank savings

deposits up to P500,000.00.

 •There are many types of investment in

the financial market. Whatever type of

investment you want to engage in, there

is always a "risk" in investing.

 A. Bank Time
Time

Deposit

-is a low-risk investment but provides a higher

return than keeping them in a savings account.

-the bank locks your money for a certain period.
- You cannot withdraw your money during this

lock-in period.
-Interest in your time deposit is either paid to you

on a monthly, quarterly, or yearly.

 Money may diminish in purchasing
value due to the effect to high
inflation.
Inflation - is rate of increase in prices of
goods.
What do bank do with your

Money?
 They invest your money in some

forms to generate profit for them to

be able to pay the guaranteed

interest rate for yourr deposits.

They can either loan it to other

clients who need money to finance

their own business.

The bank also makes others of

investment by buying shares
of ownership in a business.


B. Government
Bonds/Treasury Bills

-are monetary instruments offered by the

government in the financial market for people who

are willing to invest their money with low risk and a

fairly better return than putting your money in the

bank as savings or a time deposit.

-It is a low-risk investment because the government

is guaranteeing it.
 The only risk if the government goes

bankrupt and has no money to pay back

the investor.
 C. Real Estate

-Another type of investment is real estate, You can buy a piece of

land or property that you feel may grow in value after a long time.

Types of Real Estate

1.Commercial Real Estate

2. Industrial Real Estate
3. Residential Real Estate
4. Land Real Estate

 affected

Property values are affected

by many factors:

-Land properties vary in value from location.

-It depends on economic growth of area.
-If there is a big economic growth in terms of

productivity, whether commercial, industrial or

agricultural, property values will surely grow as

well.

 -Real estate properties, especially

land, are generally safe investments

in the long term because lands do not

normally depreciate and continue to

increase in value over a long period.

Unit

D. Mutual Funds or Unit

Investment Trust Funds

- Is classified as a unit investment trust fund, is a

type of investment offered by bank or any

authorized entity.
-This pool of money is represented by units and

each unit is equivalent to a certain amount.

The bank is the one doing all investment work.

The This type of investment is not a low- risk

investment but medium-to high risk

investment.
The Bank managing the fund will have no

control in the maanagement and success of

that business entity

 E. Stock Market or Equity Market
-similiar to mutual funds in terms of nature
and process of investment.
- investor has freedom of choice which
company he/ she wants to invest the money.
-When you buy a shares of stock of particular
company, you actually become a part - owner
of the company.
-The stock market is generally a high risk market.
-It offers high gains or return.

 take

The investor should take

with

caution when dealing with

call

what they call

companies

sunrise/sunset companies

companies

because these companies

and

tend to be volatile and

unpredictable:
 The investor should take caution when dealing with

with

what they call sunrise/sunset companies because these

these

companies tend to be volatile and unpredictable:

1. Choose carefully the company you want to invest your money

in.
2. Find out who are the people behind the company
3. Analyze the companies in terms of the stability of their share

prices over a long period.

4. Look for companies that have good expansion plans in the

future and potential growth in the market.

5. Look for companies that have a monopoly on the market or

very few Competitors.

 Gives the Advantages and Disadvantages of the

following:
A. Bank time deposit
B. Government bond / treasury
C. Real estate
D. Mutual or Unit Investment
E. Stock Market or Equity

 Sentence Completion
The statement is: Knowing about
the benefits of savings and
investment, I promise that in the
future I will__________