This book provides everything your students need to know about banking, including why people use banks, how interest works, ATM machines, savings and checking accounts, and credit cards. Students will learn many new vocabulary words and gain confidence in their ability to take advantage of what banks have to offer.
Interested in using this resource in your classroom? Check out the posters that go along with this book: Saving.
Why are there banks? What purpose do they serve in our economy?
Banks provide a variety of functions. They are a place where people can save money. Banks also provide a place to keep valuables – in safe deposit boxes. Banks provide loans to businesses. Banks also provide other services like signature guarantees, ATM machines, cashier checks, etc.
What is the “principal” of a savings account or certificate of deposit?
Principal is the sum of money in an account – not including interest.
What does it mean for a check to “bounce?”
A check orders the bank to pay someone a certain sum of money. If you do not have enough money in your account to cover the check, it will “bounce.” The bank usually assesses a fee to someone who overdraws his or her account.
Why do people use checks instead of currency?
It saves people from having to carry around large sums of money. It is far more efficient than using currency.
What does it mean for someone to give you “credit?”
It means that someone is willing to lend you money, usually with interest added.
How is a debit card different from using checks?
A debit card functions like writing a check – the funds are taken from your checking account. However, it is easier (and cheaper) than writing checks. The main issue with a debit card is that you have to keep track of the balance remaining in your checking account.
How is a debit card different from a credit card?
Debit cards simply deduct funds from an existing checking or savings account. When you make a purchase with a credit card, you are actually getting a loan from the credit card company. You must pay back the loan, with interest if you delay over a month on repayment.
What are some advantages of using a credit card?
A credit card is very handy and easy to use – especially in emergencies. You don’t have to carry a lot of cash, which could be lost or stolen. You can use them almost everywhere – even in other countries, so you don’t have to make as many cash exchanges for other currencies.
What are some disadvantages of using credit cards?
The biggest danger is amassing too much debt, especially if someone has multiple credit cards. The interest rate is usually high, and a person will end up paying a lot of interest. A credit card could also be stolen, but credit companies are usually good about covering credit card theft if you report the lost card immediately.
What are some credit card “bonuses?”
Some credit cards offer points, frequent flyer miles, free phone calls, money donated to a favorite charity, or “cash back” if you use their card. Some credit card companies even offer “consumer protection.” This means that if you lose or break an item, the credit card company will replace it.
Author: Neale S. Godfrey
Illustrator: Randy Verougstraete
Accelerated Reader Level/Points: .5
Publisher: Modern Curriculum Press