|Glossary of emergency fund savings terms
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529 plan -- Named after the section of the tax code that establishes them. Offered by states to allow families to save for college in a vehicle with tax-deferred growth. These plans come in the form of prepaid tuition plans or savings plans.
Brokerage account -- An account at a securities firm or brokerage that can hold investments such as stocks, bonds, mutual funds and ETFs. Cash not invested is generally held in a money market fund.
Certificate of deposit (CD) -- A time deposit, FDIC-insured to $100,000 per person ($250,000 on retirement accounts), with a fixed maturity date, usually from three months to five years. It typically pays higher interest than a savings account and a penalty is charged for withdrawing funds before the maturity date.
Emergency fund -- A sum of money saved for urgent situations, usually kept in a liquid account such as passbook savings, money market account or money market mutual fund. The general recommended size of an emergency savings fund is roughly enough money to cover three to six months of living expenses.
6.Home equity -- The part of a home's value that the mortgage borrower owns outright; the difference between the fair market value of the home and the principal balances of all mortgage loans.
7. Money market account -- A money market account is an FDIC-insured deposit account that allows you access to the money you have deposited. Withdrawals are limited to six monthly, three of which may be by check. It's sometimes called a money market deposit account to distinguish it from a money market fund, which is a type of mutual fund.
8. Money market mutual fund
-- A mutual fund that invests in short-term debt instruments such as Treasury bills, commercial paper, and large CDs. Also referred to as money market fund (MMF).
9. Mutual fund-- An investment that pools together money from many different investors and puts it into stocks, bonds and other securities or a combination of the three. Mutual funds offer professional management and diversification.