advantages and disadvantages of instalment system
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Advantages of installment
An installment savings account can be good if you have trouble holding money aside to build up reserves. It can be better than a certificate of deposit, which has a fixed term like installment savings, because it doesn't require a big initial deposit and may pay more interest over an equal time period.
Disadvantages of installment
An installment savings account is a bit like agreeing to have a certain amount taken out of your paycheck for income taxes or to contribute to a 401(k) retirement plan. You agree to put a certain amount of money each month into that account. Unlike tax or retirement deductions, you can choose how much you set aside. It's like buying a refrigerator or a couch on an installment plan, except that with installment savings you will get that money back, with interest. Interest rates on installment savings usually are higher, even more than certificates of deposit.
An installment savings account can be good if you have trouble holding money aside to build up reserves. It can be better than a certificate of deposit, which has a fixed term like installment savings, because it doesn't require a big initial deposit and may pay more interest over an equal time period.
Disadvantages of installment
An installment savings account is a bit like agreeing to have a certain amount taken out of your paycheck for income taxes or to contribute to a 401(k) retirement plan. You agree to put a certain amount of money each month into that account. Unlike tax or retirement deductions, you can choose how much you set aside. It's like buying a refrigerator or a couch on an installment plan, except that with installment savings you will get that money back, with interest. Interest rates on installment savings usually are higher, even more than certificates of deposit.
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