Session 5 · Money, Values & You
Banking Basics
Where your money lives — and how it works for you
6th Grade Financial Literacy · 90 minutes
What banks do Interest & Riba Bank roleplay Islamic banking
Today's Plan
Here's What We're Doing
- Opening hook — what do you think banks do? (5 min)
- What banks actually do (15 min)
- Interest and Riba (15 min)
- Bank comparison + roleplay (20 min)
- Islamic banking (15 min)
- Journal (10 min)
- Recap & preview (10 min)
Knowing the plan = no surprises
Opening Hook
Inside a Bank
Raise your hand if you've been inside a bank.
What do you think they do with your money while it's sitting there?
Most people don't know — but it matters.
Today we look inside.
Lesson 1 · What Banks Do
3 Jobs of a Bank
Safe-keeping
Your money is safe, insured, and accessible anytime
Lending
Banks lend your deposited money to others who need it
Moving Money
Transfers, payments, wire to anywhere in the world
Lesson 1 · How Banks Earn Money
The Money Flow
- You deposit $100 → bank keeps it safe
- Bank lends your $100 to a borrower
- Borrower pays back $110 (your $100 + $10 interest)
- Bank gives you $102, keeps $8 as profit
Everyone agreed to this upfront. That's how conventional banking works.
Lesson 2 · Interest
What Is Interest?
Interest you EARN
Bank pays you for keeping money with them
Example: Save $100, earn $2/year
Interest you PAY
You pay a fee when you borrow money
Example: Borrow $100, pay back $110
Interest is the "price" of borrowing — or the "reward" for lending.
Lesson 2 · Riba
Riba — Why Islam Says No
- Riba (ربا) = usury; guaranteed interest regardless of outcome
- If the borrower loses everything, they still owe interest — unfair
- Quran [2:275]: "Allah has permitted trade and forbidden Riba"
- Riba creates debt traps — exploits those who are already struggling
Islamic finance says: share the risk AND the reward.
If you profit together, you lose together. That's justice.
Brain Break
Stand & Think
If you had $1,000 to keep safe — where would you put it?
Tell your neighbor. Do you agree?
30 seconds. Go!
Activity — Bank Comparison
Piggy Bank vs. Bank vs. Islamic Bank
Fill in the comparison chart together:
- Piggy Bank — safe from theft? earns interest? Riba? insured?
- Regular Bank — same questions
- Islamic Bank — same questions
Then: Mini-roleplay — Customer borrows $50 from Regular Banker vs. Islamic Banker.
Which feels more fair?
Activity Debrief
What Did You Notice?
- What's the main difference between regular and Islamic banking?
- In the roleplay — which banker would you rather borrow from?
- Does it matter whether the bank shares the risk with you?
Key insight: Islamic banking isn't just about avoiding interest.
It's about fairness — sharing risk and reward equally.
Lesson 3 · Islamic Banking
How Islamic Banking Works
Mudarabah
Profit-sharing partnership. Bank invests your money; you share profits AND losses.
Murabaha
Bank buys item for you, sells at agreed markup. Asset-backed — no pure interest.
Musharakah
Joint ownership. Both parties invest and share proportional gains/losses.
Lesson 3 · Murabaha Example
Murabaha in Action
You need a $500 laptop but don't have the money now.
Regular Bank
Lends $500. You pay back $550 over 6 months. Interest = $50 guaranteed.
Islamic Bank
Buys laptop for $500, sells to you for $530 over 6 months. Clear markup, asset-backed.
The difference: Islamic bank owns the asset first. It's trade, not a pure money loan.
Lesson 4 · Credit Unions
Credit Unions
- Member-owned cooperative — you are an owner, not just a customer
- Profits go back to members (lower fees, better rates)
- Community-focused — often serves local neighborhoods
- Not-for-profit structure = different incentives than big banks
Credit unions aren't Islamic banks — but they share the community-first value.
Journal Time
Take 8 Minutes...
"Would you rather keep your savings in a piggy bank, a regular bank, or an Islamic bank? What matters most to you?"
- Think about: safety, growth, ethics, access
- No wrong answer — explain your reasoning
Session 5 · Wrap Up
What We Learned Today
Banks keep money safe, lend it out, and move it around.
Interest = price of borrowing. Riba = exploitative guaranteed interest.
Islamic banking uses profit-sharing and asset-backed trades instead.
Credit unions are member-owned alternatives to big banks.
Fairness = sharing risk AND reward equally.
Next session: SMART SPENDING — get the most value from every dollar