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Basics Beginner: Automatic Savings and Investment Plans

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1.
An automatic savings plan withdraws money from an existing savings or checking account on a periodic basis and deposits it into another account.
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True. The period is usually monthly or weekly.
2.
If you are averse to risk and you want to save money for a purchase three months from now, why would a savings account be a good choice to put your money into?
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It has a low risk of loss. This may make it an ideal choice.
3.
Automatic withdrawal amounts from one account to another are made on a predetermined basis.
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True. Withdrawals are set up for the same day each month or week.
4.
An advantage of using an automatic investment plan to fund a retirement account is that it can benefit from compounded earnings as it grows.
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True. Most retirement plans benefit from compounded growth of earnings.
5.
Which of the following can be sources of extra money with which to start funding an automatic investment plan?
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All of the above. All of these ideas can work.