Banks are INTEREST-ing. What does that mean? Well, we use banks to save money and earn INTEREST, or borrow money and pay INTEREST. INTEREST-ing, isn't it?
You will take a short quiz online about banking and interest.
Do you save money? Where do you keep your savings? Is it a good place to keep savings, or do you spend it? Savings is money you don't spend or use to pay taxes with. In other words, if you have money that you are waiting to use, then you are saving it. Do you know that you could be earning money with your savings? How? Well, one way would be to open a savings account at a bank.
A bank is a safe place to keep money. But it is so much more. Do you know what your money does when you put it into the bank? It doesn't just sit there. Instead, your money is used by the bank. One way that a bank uses your money is by giving people loans.
A bank lends money to people so that they can buy big purchases, like a car or a house. Then the people have to pay back the loan, plus a little more. That extra money they pay back is to say thanks to the bank for lending them the money. That money is called INTEREST.
But hey, wait! Didn't the bank lend those people YOUR money? Why does the bank get paid back interest when it was your money? When you keep your money at the bank in a savings account, the bank also pays you! It is the bankers' way of paying you for letting them use your money. Can you guess what the money is called? If you said INTEREST you were right.
So you can get paid INTEREST if you put money in the bank. You have to pay INTEREST if you borrow money from the bank. INTERESTing!
You should have learned about a savings account , a passbook, a deposit, a withdrawal, and a balance. You were introduced to the concept of interest.
Go to Kids Bank and create a name to use online and take the Dollar Bill Quiz and the Interest Ray Quiz . Keep taking the quizzes until you get three stars. If those quizzes are too easy for you, click on the Dollar Bill Professor quiz and the Interest Ray Professor Quiz.