← Back to Session 5

Session 5 Study Guide: Banking Basics

Money, Values & You — A Financial Literacy Course for 6th Graders

Key Topics

TopicDetails
What a bank is and what it doeWhat a bank is and what it does
Checking accounts vs. savings Checking accounts vs. savings accounts
How banks make moneyHow banks make money: the lending model
Why people use banks instead oWhy people use banks instead of keeping cash at home
What interest isWhat interest is: the cost of borrowing money
How compound interest works (sHow compound interest works (simple explanation)
What Riba means and why it is What Riba means and why it is prohibited in Islam
The ethical concerns about intThe ethical concerns about interest-based lending
How Islamic banking worksHow Islamic banking works: no interest, risk-sharing instead
MurabahaMurabaha: cost-plus financing
MusharakahMusharakah: partnership financing
How Islamic banks are differenHow Islamic banks are different in practice
What a credit union isWhat a credit union is: member-owned, not-for-profit
How credit unions differ from How credit unions differ from banks
Things to consider when choosiThings to consider when choosing a bank or credit union
The take-homeThe take-home: interview a parent about their banking

Lesson Summaries

Lesson 1: What Banks Do

Discover what banks actually do with your money, how accounts work, and why banking exists.

Lesson 2: Interest and Riba

Learn how interest works in conventional banking and why it is prohibited in Islam.

Lesson 3: Islamic Banking Alternatives

Explore how Islamic banks work without interest. Learn about murabaha, musharakah, and other models.

Lesson 4: Credit Unions and Choosing a Bank

Learn what credit unions are, how they differ from banks, and how to think about choosing where to keep your money.

Review Questions

  1. What does a bank do?
  2. What is the difference between a checking and savings account?
  3. How do banks make money?
  4. Why is a bank safer than keeping cash at home?
  5. What is interest?
  6. Why is interest (Riba) prohibited in Islam?
  7. What does Riba literally mean?
  8. What is the Islamic alternative to interest?
  9. What is murabaha?
  10. What is musharakah?
  11. How is Islamic banking different from conventional banking?
  12. Can non-Muslims use Islamic banking?
  13. What is a credit union?
  14. How are credit unions different from banks?
  15. What should you consider when choosing where to keep your money?
  16. Why is it important to understand banking even as a 6th grader?