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Money basics

Lesson 16 · Written for kid, teen, and little

Checking vs Savings

Checking is for money you spend soon, savings is for money you keep.

The idea

A bank is a safe place to keep your money, and it keeps a careful record of every dollar that is yours. A checking account is for money you spend soon, so money goes in and out of it often. A savings account is for money you are keeping for later, and many savings accounts pay you a little extra called interest for leaving it there. Banks also lend out some of the money people deposit, which is one way they earn money themselves. 🏦

A

Words to know

5

bank

A business that keeps your money safe and keeps track of how much is yours. Your $50 is not in a box with your name on it, but the bank always owes you $50.

checking account

An account for money you plan to spend soon. Like the money for this month's bus fare and lunches.

savings account

An account for money you are keeping for later. Like the $60 you are building up for headphones.

deposit

Money you put into an account. Handing $20 of birthday money to the bank is a deposit.

interest

A little extra money a bank may add for keeping your savings there. At 4% a year, $100 becomes $104.

Try it — no accountTrue or false

True or false about banks and accounts?

Card 1 of 4

A checking account is meant for money you spend often.

Swipe the card — or tap.

In the full lesson

  1. 1True or false
  2. 2Put it in order
  3. 3Make the call

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