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Investments types 1 Government GrantsInvestments types 1 Government GrantsHere's a quick guide to some of the investment options available to you: Savings Accounts. Such accounts are a good place to store your emergency funds. They are generally insured by the FDIC up to $100,000 for all deposits at one institution and provide easy access to your money. The chief drawback is that interest rates tend to be low. Money Market Deposit Accounts. These accounts usually earn slightly higher interest than a savings account but still allow easy access to your money. Some banks and financial institutions require an initial deposit of $1,000 or more and limit the number of withdrawals or transfers you can make during a given period of time. CDs (Certificates of Deposit). CDs usually earn more interest than a savings account and are a very low-risk financial vehicle. They are generally insured up to $100,000 by the FDIC for all deposits at one institution. You agree to keep your money on deposit for a fixed period of time. Usually, the longer the term, the higher the interest rate. There may be penalties for early withdrawal. 401(k) Plans. If your employer offers a 401(k) plan, it may be one of the best retirement vehicles available to you. A 401(k) is a retirement savings plan to which you can contribute a certain percentage of your gross income. However, contributions to a 401(k) and certain other qualified deferred compensation arrangements cannot exceed $10,500 in 2001, and are scheduled to gradually increase to $15,000 in 2006. Typically with a 401(k) plan you have several investment options from which to choose, including stocks, bonds, mutual funds or CDs.
Your employer may contribute matching funds to your 401(k) plan. For example, your employer may match 50% of your contribution for any amount up to 5% of your compensation. That means an additional 50% contribution on the first 5% you contribute to your plan. Thats also why 401(k)s are so highly recommended by financial advisors. Contributions made to a 401(k) should reduce your current income taxes as well. You do defer paying income tax on the contributions you make. Likewise, the earnings in your 401(k) grow tax-deferred until the money is withdrawn. Income tax is due when the money is withdrawn. If you withdraw money before you turn 591/2, however, you may also be subject to a 10% IRS penalty. While withdrawals are generally not permitted, certain 401(k) plans may permit withdrawals for "hardship" reasons, such as medical emergencies or college tuition. You do pay income tax on the amount withdrawn, and a 20% mandatory withholding generally is required from the distribution. Moreover, the hardship distribution may also be subject to the 10% IRS penalty. ELIGIBLE FUNCTIONAL CATEGORIES:1. CONSUMER ; Government Grants- Regulation, Inspection, Enforcement; Government Grants 2. EMPLOYMENT, LABOR, AND TRAINING; Government Grants - Job Training, Employment; 3. TRANSPORTATION; Government Grants - Government Grants WHO CAN BENEFIT FROM THIS PROGRAM:- State; Government GrantsWHO CAN APPLY:Government Grants All whom apply- State (includes All 50 states,Guam,Peurto Rico,District of Columbia, public institutions of higher education and hospitals
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