Money accounts

Checking

  • associated with a debit card
  • easiest to convert to cash
  • used to pay credit cards
  • typically earns low to no interest
  • typically has no rewards/cash back

Institutions: Chase, Bank of America, …

Savings

  • long term storage
  • may have limits on withdrawal
  • typically earns low interest

Institutions: Marcus, Chase, Bank of America, …

Certificate of Deposit (CD)

  • guaranteed interest for a set period of time
  • may have penalty for early withdrawal

Institutions: Marcus, Chase, Bank of America, …

Credit card

  • make purchases through loan from the bank
  • no fees as long as balance is paid on time
  • pay balance using checking account
  • earn rewards/cash back
  • used to determine credit score

Institutions: Chase, Bank of America, Capital One, American Express, …

Brokerage

  • buy and sell stocks
  • trade options

Institutions: Fidelity, Charles Schwab, Robinhood, M1, …

Retirement

Traditional

  • use post-tax money to buy but pay tax on earnings when sell
  • no penalty to withdraw at any time

IRA

  • use pre-tax money to buy but pay tax on earnings when sell
  • lower contribution limit than 401k
  • penalty to withdraw before age 59 1/2

Roth IRA

  • use post-tax money to buy and pay no tax on earnings when sell
  • lower contribution limit than 401k
  • penalty to withdraw before age 59 1/2

401k (pre-tax/post-tax)

  • offered through employer
  • limited investment options
  • higher contribution limit than IRA and Roth IRA
  • penalty to withdraw before age 59 1/2

Institutions: Fidelity, Charles Schwab, Vanguard, …

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Jenny Xin

Jenny Xin

Trying to remember what I coded @ jennyxin.com

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