📖 Chapter 6 of 11 · Smart Money Basic (Multi Indian Language) · Class 4–7
Chapter 5 · Banks and Piggy Banks
You already know that saving money is a smart habit. But where should we keep our savings? Under a mattress? In a tin box? There is a much safer and cleverer place — a bank.
What is a bank?
A bank is a safe place that looks after people's money. You give your money to the bank to keep, and you can take it back whenever you need it. The bank keeps your money secure, and it even gives you a little extra called interest as a thank-you for keeping your money with them.
Key Word
INTEREST is the small extra money a bank adds to your savings over time, as a reward for keeping your money with them. It makes your savings grow!
What can a bank do for you?
A bank offers many useful services. You can deposit (put in) money, withdraw (take out) money, save for the future and earn interest, and transfer money to someone else — even to a person in another city — in seconds using a phone.
Story Time — Tashi's First Bank Account
Tashi · Gangtok, Sikkim
Tashi lived high up in the beautiful hills of Gangtok. For three years he had been dropping coins into a wooden box his grandfather had carved for him. When he finally counted them, he had saved ₹2,150 — a big amount!
His mother took him to a nearby bank to open a special children's savings account. The kind lady at the counter helped Tashi fill a form, and soon he had his very own passbook with his name printed on it. “Now your money is safe here,” she said, “and the bank will add a little interest every year.”
“How much interest?” Tashi asked. “About 3 rupees for every 100 rupees, each year,” she explained. Tashi did a quick sum in his head: “So my ₹2,150 will become about ₹2,214 next year, without me doing anything?” The lady smiled. “Exactly! That is the magic of saving in a bank.”
Solved Examples
Think first, then read the answer!
1. Tashi saved ₹2,150. The bank gives interest of ₹3 for every ₹100 in a year. Roughly how much interest will he earn in one year?
Show answer
Answer: Number of hundreds in ₹2,150 = 21.5. Interest = 21.5 × ₹3 = ₹64.50 (about ₹64). So his savings grow to about ₹2,214.
2. What is the difference between depositing and withdrawing money?
Show answer
Answer: Depositing means putting money INTO your bank account. Withdrawing means taking money OUT of your bank account. One adds, the other removes.
3. Sunita deposits ₹500 on Monday and ₹300 on Friday, then withdraws ₹200 on Sunday. What is her balance?
Show answer
Answer: Balance = ₹500 + ₹300 − ₹200 = ₹600. Sunita has ₹600 left in her account.
4. Why is keeping money in a bank safer than keeping it in a tin box at home?
Show answer
Answer: A bank protects your money from theft, fire and loss, keeps a proper record of it, and even pays you interest so it grows. A tin box at home does none of these.
Fun Fact!
Under the Pradhan Mantri Jan Dhan Yojana, India opened over 50 crore bank accounts — one of the largest financial-inclusion drives the world has ever seen. Even families who never had a bank account before now have one!
Check Your Understanding
Q1. What is a bank, and why is it a good place to keep savings?
Q2. Explain the words deposit, withdraw and interest in your own words.
Q3. Ramesh deposits ₹800, then ₹450, then withdraws ₹300. What is his balance?
Q4. If a bank gives ₹4 interest per ₹100 per year, how much interest will ₹1,500 earn in one year?
Q5. Name any two services a bank provides.
Q6. Why is a bank safer than a tin box at home? Give two reasons.
Check your understanding — Chapter 5
Tap an answer to check it instantly. These are for practice — nothing is saved or sent.
Q1. What is interest?
- Extra money a bank adds to your savings over time
- A fee you pay the bank every day
- The name of a coin
Show answer
A. Extra money a bank adds to your savings over time
Q2. “Depositing” money means —
- Putting money into your account
- Taking money out of your account
Show answer
A. Putting money into your account
Q3. Why is a bank safer than a tin box at home?
- It looks nicer
- It protects money, records it, and pays interest
Show answer
B. It protects money, records it, and pays interest