Jana Taboada

12 Pascal
March 24, 2020

Moral Education

1. What are the different saving investment schemes discussed in the report? Explain briefly how
each functions and its advantage to the costumer.

 Saving in Banks- Banks typically allow the saver to put money into the scheme which is
then invested on their behalf to generate a return, or pays a rate of interest which is
associated with the scheme. The terms and conditions associated with these schemes
vary. An advantage of having a savings account is the ability to withdraw at any time,
unlike other long-term investments such as certificates of deposits.

 Government Sponsored Savings Account- In some countries, governments encourage

people to save by offering savings schemes which are guaranteed by the government and
which provide some benefits to savers. The benefits include tax benefits- when savings
are withdrawn they are not subject to taxes.

 National Bonds Corporation- National Bonds Corporation offers wealth accumulation

products to client base of retail, high net worth individuals and corporations. It also offers
investment plans, saving schemes and saving certificates, all on a Shariah compliant
basis. National Bonds Corporation manages its investment portfolio through an Islamic
Mudarabah fund structure. The benefit of this that it rewards the saving behavior of its
customers with loyalty bonuses and chances at winning monthly and quarterly draw
prizes.

2. What applicable savings investment for students, parents, single individuals? Explain why it is
the most applicable for each of them.

 Students- Securing a savings account: A savings account is one of the safest places to
keep money you’re planning to use in the near future. As long as the money is in an
account insured by the Federal Deposit Insurance Corp. (or the National Credit Union
Administration), you’ll still have savings even if your bank goes belly up. You’re also
guaranteed to earn interest on top of the money you deposit.
  Parents- Saving for Emergencies: For a parent, it’s important to prepare for the
unexpected. Life comes at you fast, and you need to have a plan for when it does. Add
kids in the mix and your chances of something unanticipated happening grow. That’s
why it’s crucial to have an emergency fund to protect you from unpredictable costs.
Everyone is bound to experience fair share of costly scenarios, and having that cushion of
cash stored in your emergency fund will soften the blow.

 Single Individuals- Saving for Retirement: If you are young, your greatest financial asset
is time—and compound interest. At this point in your life, your primary investment
objective for your long-term savings should be growth. Investors in their 20s will have at
least 40 years over which to accumulate retirement savings.

3. To summarize mention 5 main advantages of saving investments and a counterpart loopholes

of such investment.

 To provide for family- Unexpected scenario can happen so no one is really safe, worst
case scenarios that requires big amount of cash are natural disasters( preparation alone
requires big amount of money), robbery ,unexpected death that has big amount of debt.
 For emergency purposes – If you have saved your money in the bank for emergency
purposes then there’s a chance that you won’t be able to have access to your savings due
to insolvency.
 Ensure financial security – This can be unreliable at times as interest rates can be
adjusted to combat inflation and a chance of losing the security itself exists if the money
is lost due to bankruptcy of the banks or corporation.
 Money for Future Purposes – The things that are about to happen in the future are
not100% assured that money will be involved and might lose the chance to spend the
money in the present.