Long-term Range
Money goes away, and comes back bigger another day.

Last summer, Jeannie sent her pet monkey Fred to summer camp for a few months. When he came back to her in August, he was not only tanned and more fit — he’d grown five inches, too. So when she received a total of $500 on her 15th birthday, she wanted to do something similar with all that money: send it away for a while so it could grow.

So, she put her $500 into a savings account that she decided not to touch for several years. She knows that if she doesn’t touch that account, her money will keep growing and earning interest.

Jeannie also could have put her money into a certificate of deposit, or a CD. When you put your money into a CD, you agree to leave your money in an account for a fixed amount of time. Your money will earn interest while it’s in that account, and you won’t be able to spend it while it’s there.

Take a look at these flowers. One of them is like short-term savings, and the other is like long-term savings. You can pick the short-term flower any time you want, but look how much bigger the long-term flower grows. Putting your money away for the long term means your money has a chance to grow and earn more interest as time goes by. Just remember: If you take your money out early, you’ll end up with less interest and a smaller balance.

So make sure you have enough money in another account to cover your other expenses, like Sneaker Town sneakers and spelunking adventures, in the meantime.