Understanding banking & bank accountsMY MONEY 1

What we’ll cover

Do you need a bank account? Meet Jess! Different types of bank account How banking (and bank accounts) work

Adapted from: NATWEST MoneySense (2014) My money safety. [Online] available from: http://www.natwest.mymoneysense.com [accessed 8th December 2016].

Do you need a bank account?

What would happen if you kept all of your money at home? Would you spend it all at once? Would you be careful and save some for a rainy day? Where would your money be safer if you went on holiday or

went out for the day?

Meet Jess!

Jess has £100 from her birthday

She doesn’t know what she wants to buy with it yet, but she knows that she doesn’t want to spend it on just anything

She also doesn’t want to be tempted to spend it until she makes her mind up

Jess decides to put her £100 into a bank account. Which one should she choose?

Savings account

A safe place to have your money while you save up for something

Pays you money (interest) the more money you have in the account and the longer you keep it there

Stops you spending it so easily as the money isn’t under your mattress!

Current account

Helps you to manage money coming in and going out

You can have your wages paid in if you work

You can pay bills You may get a debit (chip and pin

card) Younger customers may only have a

cash card

Basic account

Like a current account but with less features

Good for people who aren’t great at managing their money

You can only pay with what you have in your account so you may not get a debit card, but you can still pay bills

Stops you getting into debt

Student account

A special account for people at college or university

You get a debit card to withdraw cash or pay for things

Once you are 18 you may be able to apply for things like an overdraft (spending more than you have but you have to pay it back)

Lots of student accounts give you extras so Jess would need to shop around!

Which account do you think will be best for Jess?

Were you right?

If you said savings account WELL DONE!

Jess doesn’t need to pay bills or manage money coming in and out.

A savings account may also pay her a little bit of interest until she decides what to spend her birthday money on.

What is banking?

Banking is the way we manage money If you have an account with a bank, you are using their services

and facilities It covers savings Spending and managing bills Whatever type of bank account you have, you are using the

banking system

What have we leant?

1. PUTTING MONEY IN A BANK IS SAFER THAN KEEPING IT AT HOME

2. THERE ARE DIFFERENT TYPES OF BANK ACCOUNTS DEPENDING ON WHAT YOU WANT – SAVE MONEY OR MANAGE YOUR SPENDING AND BILLS

3. HOW BANKING WORKS

NEXT: OPENING A BANK ACCOUNT