Question

Jordan is a great kid, and he works very hard at his favorite sport: basketball. He gets average grades at school because he spends a lot of his after-school time hanging out with friends and playing video games instead of doing homework. He earns money for doing lawn work and spends every nickel on new video games and eating out with friends. Jordan is about to graduate from high school, and his uncle is going to deposit money in an account for Jordan's future. "In ten years, you'll need this money," he tells Jordan. If you were Jordan's uncle, which kind of savings account would you choose for your gift? Why?

Answer 1

@angle @sillybilly123 @SmokeyBrown whenever you get a chance

Answer 2

Here is a general list of common savings accounts: https://www.money-rates.com/basicguides/saving/types-of-savings-accounts.html

a normal savings account is where you can put money in, and take money out... it's basically like a checking account, except it's called savings (the big banks might even give you a 0.05% interest)

high interest savings account where the interest rates are better (but not as good at 2% inflation). for example ally bank has 1.85% interest rates for their savings account

rewards savings accounts might give you some money if you put in a large amount as soon as you open the account

joint savings accounts can be accessed by more than one person

student savings accounts take into consideration that you're probably not making that much money as a student...

CERTIFICATES OF DEPOSIT (CD) accounts lock your money for years at a time at certain interest rates (2~5%) and there are penalties for taking any money out before your scheduled time

college savings accounts

retirement funds

Answer 3

So here are some things we want to consider:

- if Jordan is given all this money at once, we are pretty sure he is going to spend it all on games, food, and friends = we want to lock down his money so he can only access it in 10 or so years
- we want the money within that timespan to be able to grow (aka, include a good interest rate)

Both CDs and Retirement plans can lock down money and only let you access it after a certain number of years.
However, retirement plans mainly only want you to take out the money after the age of 59 or something.
so there is only one option left!