Grade 3-5

Banking is INTEREST-ing!

Updated: May 26 2015,
Author: Mickey Ebert

Banks are important to Americans. We use banks to save money and earn interest, or borrow money and pay interest. This lesson introduces the concepts of banking to children.


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?

Learning Objectives

  • Identify a bank is one place where people save money.
  • Discuss and use the concept of interest.

Resource List

  • The Adventures of Dollar Bill: A story that teaches students about saving money in a bank. (use spacebar or mouse click to advance slides)
    Adventures of Dollar Bill
  • The Adventures of Interest Ray: A story that teaches students about interest.
    (use spacebar or mouse click to advance slides)
    Adventures of Interest Ray


Start off the lesson with a series of questions that will focus the students and get them interested in learning moredollars about interest. Discuss the various answers with the class.

  • Do you save money?
  • Where do you keep your savings?
  • Is it a good place to keep savings, or do you spend it?
  • Do you know that you could be earning money with your savings?
  • In what ways can you earn money with your savings?

Now have the students read the story below to gain an understanding of savings and interest.

A bank is a safe place to keep money. But it is so much more. Ask the students if they know what their money does when it is put 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.

Use the paragraphs below to explain to the students that they can get paid INTEREST if they put money in the bank. Also use the paragraphs below to explain that they have to pay INTEREST if they borrow money from the bank. INTERESTing!

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

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.

To learn more about savings, visit Adventures of Dollar Bill. When you are through with the Dollar Bill segment, visit Adventures of Interest Ray and learn about Interest. 


The students will have learned about a savings account , a passbook, a deposit, a withdrawal, and a balance. They were also introduced to the concept of interest.


Have your students go to Kids Bank and create a name to use online and take the Dollar Bill Quiz and the Interest Ray Quiz. They should keep taking the quizzes until they get three stars. If those quizzes are too easy for your students, have them click on the Dollar Bill Professor quiz and the Interest Ray Professor Quiz.

Personal Finance