Why is learning about banking important?

Money affects everything. Learning how to use money wisely will help set your life on a course for success. Having sound knowledge about how to make smart money decisions will give you more freedom in life and that’s something worth exploring. We realize that becoming savvy about money can be a daunting task. That’s why The National Theatre for Children has partnered with MyBankTracker.com to give you access to information about money that is relevant to you.

MyBankTracker.com is a commercial banking website that uses data to help you choose banks and other financial institutions to help you set up a savings account, get a loan or to provide information on other money-related services. Read below to learn more about savings accounts, using credit wisely and some information on loans you may take out in your life. As always, a savvy consumer will use critical thinking abilities when using and comparing information from a commercial source. Use your exploration of MyBankTracker.com as an opportunity to exercise those critical thinking skills.

Student Activity

  1. Look at the top-rated banks/accounts at https://www.mybanktracker.com/savings

    • Be sure to read the methodology at the top of the page first to understand what makes something the "best" or "top" account

    • Determine what features are most important to you in your current life situation
  2. Then, practice being a saavy consumer by going to https://www.mybanktracker.com/compare-savings-rates to compare some of the top accounts against others to determine for yourself if they are the best.

  3. Finally, practice being an informed consumer by using the Search box to find an article that reviews the product you selected and read the pros/cons from an expert.

Saving Money

  • Banks

    Banks offer a way of saving money that is reliable and secured. Opening a savings account is one of the first financial services students are exposed to. A savings account can earn you steady, predictable income through compound interest. However, the tradeoff may be that the interest you can earn in a savings account is probably going to be less than other investing options, like a certificate of deposit or a longer investment strategy that may include stocks, mutual funds, etc.

  • Credit Unions

    Credit unions offer many of the same saving opportunities as banks, but because they are non-profit, they usually funnel their profits into better interest rates, better services or both. Since they are non-profit, they tend to be smaller organizations and can have customer service superior to a big-name bank.

  • Compound Interest

    Compound interest is earning income on the interest that’s already earned. This effect adds to itself, or compounds. Compound interest can earn a lot of money over a long period of time. That’s the trick: getting into the habit early and sticking with it. Click the “Savings Interest Calculator” link below to see compound interest in action. You can see how much interest you can earn depending on the interest rate you enter.

Savings Calculator

Having a savings account is a great way to feel more financially secure. Money in your savings account can be used to save up for something you’ve always wanted, or for emergencies. But did you know that when you put your money in a savings account, the money in the account actually earns money? It’s called compound interest. The bank pays you a small percentage for letting them have access to your money while it’s in the account. The interest is added to your initial balance and the next year, you earn interest on that new, larger amount of money. It works best if you leave your money in an interest-bearing account for a long time.

Use the calculator at the link to check out different interest rates and how they would affect your account balance and see the power of compound interest over a long period of time.

High Interest Checking Account Calculator

Using a checking or bank account allows you daily access to your money so you can pay bills, buy food, and do all of the things you need to with your hard-earned cash. There are some checking accounts that also allow you to earn interest on your money. It works the same way as a savings account.

It can be a bit trickier to earn interest, since money in a checking account usually flows into and out of it, but the calculator at this link can make you aware of some typical checking account interest rates and how they affect the money you have in it.

Credit vs. Debit

Using your credit or debit cards wisely is important to overall financial health. Read below to find out the major differences between them.

When you buy something with a debit card, the money is taken immediately out of your bank account. You have to have the money in your account or you’ll get charged fees until you deposit more. So, you really need to pay close attention to your account. If you only have $10 in your account, then use your debit card to buy lunch, then some new shoes and then a movie ticket, most likely, your purchases will be declined, but you could also be charged a fee for each one of those transactions. And those fees add up in a hurry!

Credit cards work a little differently. When you use a credit card, you’re actually borrowing money from the credit card company. You don’t owe anything right now. BUT – at the end of the statement period, the credit card company will send you a bill for everything you charged over the last 30 days. You can pay any, some or all of the bill now. But be warned, if you don’t pay your balance in full, the credit card company will charge you interest, or extra, on what is left unpaid. A common interest rate can be as high as 18%.

Emergency Fund Calculator

Emergencies can be stressful: a flat tire, a broken window or a bill that’s higher than expected. Sometimes, more serious emergencies can make life tough: a lost job, serious illness or car accident. Planning ahead can help make emergencies a bit more bearable. It’s always a good idea to have enough money in your savings account to help you survive financially for one to six months just in case something unexpected happens.

Use the calculator at this link to add up your monthly expenses. Then multiply that number by one, two or even six months to see how much you’ll need to have on hand to survive whatever emergency life may throw at you.

Credit Card Comparison Chart

In a savings account, you can earn interest by keeping your money in the account for a long time. When you use a credit card, you are paying the credit card company interest for the convenience of using their money to buy things you normally couldn’t. The longer it takes you to pay off the balance of your credit card, the more interest will add up, or accrue. This can lead to a lot of financial trouble if you continue to buy things with a credit card. The interest will quickly build up over time and then it can become very difficult to pay it off. This can also have a negative effect on your credit score. Use the tool at this link to look at the interest rates for different credit cards. They differ based on your credit rating. Some cards may not be available for people with compromised credit ratings or in a certain age range.

Loans

When you take out a loan, it means you are borrowing money from someone (or some bank or credit union) and promising to pay it back over time. The person or bank lending you the money usually asks for something in return: interest. Interest is a fee that is added to the initial amount you borrowed. The amount of interest charged on a loan is called the interest rate. How interest is calculated depends on the loan and different loans have different interest rates.

Just like interest can compound to earn you income in a savings account, interest can grow, or accrue, on a loan. If you miss payments on a loan, sometimes the interest rate can go up. It’s always best to try and get a loan with the lowest interest rate possible and then pay that loan off as quickly as you can.

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