Delaware Recommended Curriculum
This unit has been created as an exemplary model for teachers in (re)design of
course curricula. An exemplary model unit has undergone a rigorous peer review
and jurying process to ensure alignment to selected Delaware Content Standards.
Unit Title:
Reasons for Banks
Designed by:
Rodney Collins
Lake Forest School District
Adapted by:
Taylor Domenici
Jill Szymanski
Red Clay School District
Content Area:
Grade Level:
Social Studies
5
Summary of Unit
The role of banks and other financial institutions in the economy is to transfer
funds, directly or indirectly, from savers to borrowers. The money households do
not spend is called savings. An economist uses saving and investing to describe
what households do with money they do not spend on goods and services. Saving
and investing are essential to long-run economic growth. Saving provides resources
to businesses to be used as investment in capital goods. When loans are made to
borrowers, it stimulates the nation’s economy. The purchase of more capital goods
increases a nation’s production capacity for goods and services, increases the gross
domestic product, and can ultimately increase the standard of living.
Starting or improving a business or purchasing or renovating a home
requires large amounts of money (financial capital). Since most people do not have
large amounts of savings to finance such ventures, money (financial capital) has to
be borrowed from other sources. For example, if a business finds demand for its
goods and/or services increases, it might borrow money to purchase capital goods
to expand. This expansion might result in hiring more workers. This increases the
overall level of income in the community. When home owners get a mortgage for
the construction of a new house, more workers must be hired to build the houses.
Their incomes are then used to purchase more goods and services. In addition to
constructing the house, many homeowners will purchase additional goods and
services such as furniture, appliances, landscaping, and curtains.
All these
purchases create additional jobs and income which is spent in the community.
Students need to understand how a loan impacts economic activity in the
community.
Banks receive deposits from savers and provide loans to borrowers. Banks
provide an incentive to savers by paying interest on the deposits, and then charging
interest to borrowers. The difference between the two is the bank’s profit. A bank
is a business, like any other, seeking to maximize profit and minimize costs. Banks
also facilitate exchange by providing access to money. Bank depositors can write
checks or withdraw cash in order to purchase goods and services.
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Delaware Content Standards
Economics Standard Two 4-5a: Students will understand the role of banks in the
economy.
CCSS.ELA-Literacy.W.5.9
Draw evidence from literary or informational texts to support analysis, reflection,
and research.
CCSS.ELA-Literacy.SL.5.1.a
Come to discussions prepared, having read or studied required material; explicitly
draw on that preparation and other information known about the topic to explore
ideas under discussion.
CCSS.ELA-Literacy.SL.5.1.c
Pose and respond to specific questions by making comments that contribute to the
discussion and elaborate on the remarks of others.
Big Idea
Interdependence1
Essential Questions

What roles do banks play in a community?

How does a bank make profit?
How might a bank affect the community?

Knowledge and Skills
Students will know…

Saving and borrowing

Role of banks

How a loan stimulates economic activity
Students will be able to…

Understand multiple causes and use information to predict likely effects

Use social studies materials and knowledge as evidence to solve problems and to
make and support reasoned decisions, explanations, conclusions, or predictions

Explain the reasoning used in making decisions or predictions, solving problems,
and drawing conclusions
Trading Partners, a DRC unit for grade 2 about economic interdependence, is available for reference on
the DOE website.
1
2
Anticipation Guide2
Using the Anticipation Guide Before Teaching the Unit
Prior to teaching Lesson 1, give each student an Anticipation Guide (Handout 1).
Students will independently complete the anticipation guide marking whether they
Agree or Disagree with each statement under the Before column only. If a student
is unsure, they can mark Don’t Know. Collect all student handouts and save for the
end of the unit.
Disagree
Agree
After
Don’t
Know
Disagree
Agree
Before
Banks are the best place to keep money.
The bank pays you.
The ATM will give me money when I need it.
I only go to the bank to get money.
If I don’t have enough to buy what I need, I need
to wait until I make enough money.
Banks help the community.
Using the Anticipation Guide after teaching the unit
After teaching the unit have students complete the After column on the right side
of the chart. Students should then choose one of the statements in the anticipation
guide to justify their answer as to whether they agree or disagree with the
statement.
2 Adapted from Classroom Strategies for Interactive Learning by Doug Buehl.
3
Lesson 1: The Role of Banks3
Essential Question

What roles do banks play in a community?
Background
Banks and other financial institutions perform two primary functions. First, they
accept deposits from people who want to save their money in a safe place and also
earn interest on their savings. People can withdrawal money from these accounts
when they wish to use it. Second, they lend money to people who want to borrow.
When a bank lends money, the transaction is called a loan. Loans create serious
obligations. Borrowers must repay bank loans with interest. In paying interest,
borrowers compensate lenders for the use of their money. People often use
borrowed money to buy goods and services in the community. Their spending
provides income for workers and business owners in the community, thus fostering
additional rounds of spending and saving.
Instructional Strategies
Strategy 1: Activating Strategy
Opening the lesson, display for each student a simulated $50 bill. Present students
with the following idea:
Your parent just gave you a $50 bill for your birthday. Visualize what you could do
with the $50. Share your idea with a partner.
Now your parent makes you put $50 in an account at the bank. If you had your
choice, what would you decide to do with the money besides putting it in the bank?
Give students time to respond and share their ideas with the class. Construct a
chart of class data as each child shares his/her response. Create categories for the
chart based on the responses, like the one below.
3 Handouts adapted from- Handsonbanking.org/What Banks Do
4
For example, if the student responds, “I will buy a bike,” the teacher will add the
category “spending” onto the data to the chart.
If students give responses about saving, divide the categories into “saving at home”
and “saving at the bank.” This will be important later when distinguishing between
the benefits of saving at home and the bank.
Teachers should look for ideas leaning towards the concepts of spending (i.e. bikes,
clothes), saving (i.e. drawer, piggy bank, purse), and investing. Students typically
will not come up with the ideas of investing; however, you can inform them that
adults may choose this option (i.e. stock market, retirement account) and add this
category to the chart.
Have the students analyze the chart and draw conclusions. Discuss the idea that
some students choose to spend and others choose to save their money at home.
Refer back to the original scenario and ask students, “What are the
benefits of putting your money in the bank?”
The following ideas should be addressed throughout the discussion:


safety
interest
Strategy 2: Developing Vocabulary
Give each student a copy of Handout 2: Banks and
Your Money. Instruct students to cut out the cards
and sequence them to show what happens to
money when you put it into the bank.
Teacher Note
At this time use the word “put” to
signify depositing money into the
bank, do not use the term
“deposit” this will be addressed
later
in
the
lesson
when
vocabulary is being introduced.
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Instruct students to discuss their sequence with a partner or table group. Have
students share their thoughts on the sequence of their cards.
With a teacher set of cards, walk students through the correct sequence using the
teacher copy on page 2 of Handout 2 as a reference for the sequence.
Students should paste their cards in order on a separate sheet of paper or in their
notebooks.
Place the cards in the correct sequence on the board. Use Banking Vocabulary on
page 3 of Handout 2 as a resource for vocabulary terms while you explain the
process on each card.
Using “Card A” explain the following:
You receive money for your birthday.
A
Using “Card B” explain the following:
After you receive your money for your birthday, your parents want you to keep it in
a safe place in a bank account.
Explain to students the definition of bank account from Handout 2. Have students
write the words bank account on their paper.
Explain to students that putting money into a bank account is called depositing
and share the definition of the word. Add the word deposit to the card with an
arrow representing the action.
B
bank account
6
Using “Card C” explain the following:
When money is in your bank account it accumulates interest. Explain to students
the definition of the word interest according to the definition from Handout 2.
Instruct students to add the term interest to their card as shown below.
C
interest
Using “Card D” explain the following:
Your money is now accumulating interest in the bank. You make a decision to
spend some of your money. You must first withdraw the money from your bank
account. Explain to students the definition of withdrawal. Add an arrow to the card
and the word withdrawal.
After withdrawing money from your account, you want to spend the money at the
shop buying what you like. Share with the students the definition of the word
spend. Add the word spend to the card with an arrow representation.
D
spend
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Check for Understanding
Have students reflect back to the original scenario:
Your parent just gave you a $50 bill for your birthday. Your parents make you put
$50 in an account at the bank.
If you had your choice, would you decide to put all of your money in the bank like
your parents suggested, or would you choose something else? Explain your choice.
Strategy 3: Simulation4
When the students enter class, they will have a
cup with 6 Skittles on their desk. The students
will be told that this is their “Skittle Savings
Account.”
Refer back to previous strategies asking
students, “What can you do with your money?”
Students should respond that they could spend
or save their money.
Next, discuss what happens when people save
money in a bank. The students should state that
the money would earn interest. Refer back to
Card C from Strategy 2.
Background Information
This is a hands on lesson to show
students how bank accounts gain
interest. This allows students to
understand the idea of “compound
interest”. Compound interest can be
thought of “interest on interest” and
will make a deposit grow at a faster
rate.
This lesson can be done throughout a
class period or throughout an entire
class day, depending on how your
classroom schedule is set up. You will
need to identify five periods that you
will
distribute
Skittles
to
your
students. During a class period, you
can do it every ten minutes.
Throughout the day, you could do it
every hour.
Explain the simulation to students.
“Today you were each given 6 Skittles to start a back account. There will be five
savings period throughout the day. Each of these periods will coincide with a
month’s time. During each period, you will have the option to eat your Skittles or
save them. At the end of each month, you will be given interest based on the
number of Skittles in your cup. This is how a bank operates. At the end of each
month they award interest based on the amount of money in your account.”
Model for the students how to complete Handout 3, the Skittle Bank Account Log
after period 1. After students have completed the log, distribute Skittles to each
student according to their Skittle balance. You will repeat the same process for
each period. At the end of the lesson, have groups of students share their logs with
each other.
Debrief with the following questions:
*Who had the most Skittles? Who had the least amount of Skittles?
*Why did some people have many Skittles and others have very few Skittles?
*Why would a bank pay you money to hold your money for you?
4 Adapted from: econedlink.org/What’s My Interest
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Lesson 2: Interesting Interest5
Essential Question
 How does a bank make profit?
Instructional Strategies
Strategy 1: Quick Write/Admit Ticket
At the beginning of the class, give the students an index card. Have the students
respond to the following, “What is a loan?” on the front of the index cards. After two
minutes, discuss the students’ prior knowledge on loans.
Part of this discussion should focus on interest. Remind students that in a previous
lesson, we learned one reason to deposit money into a savings account is to earn
interest. Banks pay this interest to customers. Remind students that a bank is a
business, and the goal of a bank is to make a profit.
Ask students for ideas on how a bank might make money if they are paying money
to each customer that has a savings account. After having the students share
ideas, explain that a bank makes money by charging interest on money that they
loan to customers.
Strategy 2: Simulation
Prior to the lesson, create a “town” on a large piece of butcher paper. Click here for
a sample.
Explain to students that today you will be role-playing to see the role of a bank in a
community. Review the reasons why a person might visit a bank.
Review the two types of interest. Interest that is paid to customers who have the
bank hold their money, and interest that the bank charges customers when they
borrow money.
Explain that the bank uses the money customers deposit in a savings account to
make loans to businesses and people.
Explain that you will be the banker for this lesson. Set up a desk at the front of the
room and place a sign that reads “Community Bank” on the desk.
5 Adapted from the National Council on Economic Education - Focus: Grades 3-5 Economics/Bulletin Board
Banking.
Admit/Exit Ticket Strategy adapted from Classroom Strategies for Interactive Learning by Doug Buehl.
9
Give six paper clips and one penny to each student. Have each student draw a
number from the bag. Distribute one index card to each student who drew a “1,”
two index cards to each student who drew a “2,” three index cards to each student
who drew a “3” and four index cards to each student who drew a “4.”
Explain that the index cards and paper clips represent income. Explain that in a
community not all people have the same amounts of income, so each student in the
class will have different amounts of income.
Tell students that they will use the index cards to “build” a house or a business, and
what size their house or business will be, they will flip their pennies and follow the
instructions in Visual 1.
Display Visual 1. Explain to the students that they are to flip their pennies twice
and record whether the penny lands on heads or tails. Display Visual 2 and explain
the following instructions:
•
•
•
•
•
If the students have the correct number of cards for their individual
projects, they can begin building the house or business using their
cards.
The students may tape cards together if their project calls for more than
one card.
Once the students have built a house or business, they may tape it on a
street on the town you created.
Some of the students may have more cards than they need for their
building projects. Others may not have as many as they need.
If the students have more than enough for the project, they may save
some of the cards by depositing them in the bank. For each card that a
student deposits in the bank, he or she will earn one paper clip in
interest.
Ask how many students do not have enough cards to build their designated project.
Ask those students what they could do to build their business or house. They could
borrow money from the bank in the form of a loan.
Tell students that to borrow a card from the bank, it will cost them two paper clips
in interest. Remind them that one way banks can make a profit is to charge more
interest to those who borrow than it pays to those who save money and deposit
their money in the bank.
Once each student has saved or borrowed, show the students how the bank’s
holdings (paper clips) have increased. Also draw the students’ attention to how
cards were transferred from the savers, to the bank, and then to the borrowers.
Allow time for each student to build a house or business and place it in the town.
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Check for Understanding
Have a class discussion using the following questions as a guide.








In our community, did everyone have the same income? Why?
People use their income to buy goods and services, to save for the future, and to
pay taxes. How many people in our community used their income to “buy”
houses or businesses? How many people saved a part of their income?
When people in the community saved at the bank, what did they receive? What
did this represent?
Why do banks pay interest?
Why do the people in the community borrow from the bank?
What did people in the community pay when they borrowed? What did this
represent?
Why do banks charge interest to people who borrow?
If you were to receive more interest (two paper clips) for each card you put in
the bank instead of one, how would this affect how much you would be willing to
save?
Strategy 3: Closing: Quick Write/Exit Ticket
Have the students take out the index card from the beginning of the lesson. On the
back of the card, have them answer the following question, “What is a loan?”
Check for Understanding:
Give each student a copy of Handout 4. Have the students complete this
individually.
Points to Consider: End of Lesson Discussion
This unit focuses mainly on borrowing and saving. One point that you may want to
address with students is that there are a variety of different accounts, such as
checking accounts, and that there are different ways money can be accessed such
as ATM, personal checks, and credit/debit cards.
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Lesson 3: Banks Help the Community6
Essential Question

How might a bank affect the community?
Instructional Strategies
Strategy 1: Role Play
Students will learn about the effects of borrowing and lending by participating in a role play
activity. Click here for the Resources 1-4 noted below.
Distribute role cards (Resource 1) and copies of the play (Resource 2) to 14 students.
Explain that these cards describe each character in the play. One additional student is
needed to be the narrator of the play.
Distribute a copy of the Record the Action Activity Sheet (Resource 3) to the students who
do not receive role cards. Explain that these students will be asked to listen to the story
and keep track of what happens when loans are made.
Ask the 14 students with role cards to take turns introducing their characters by reading the
information on their card to the rest of the class.
Students who are playing roles should assemble at the front of the room. Give each student
a name tag (Resource 4) showing his or her character’s name, and have the students
display the name tags on themselves using tape.
Allow students to present the play. When they have finished, have them return to their
seats.
Have the class create a diagram to illustrate the economic impact of the loan on the
community. All the characters except the narrator will use their signs to create the
diagram.
At one end of the board, write in large letters, “Community Bank Makes a Loan.”
Who received the loan?
Tyrone Washington.
Ask the student with the “Tyrone Washington” sign to tape the sign several inches to the
right of the words “Community Bank Makes a Loan.” Ask the student with the “Cathy
Alberichi” sign to tape the sign below the bank name. Draw a line from “Community Bank”
to the sign labeled “Tyrone Washington.”
Whom did Mr. Washington hire to do the work?
Alisha Denzel.
6 Adapted from “How Banks Affect the Community.” Money Talk$. Volume 3, Issue 1. Winter 2006
12
Ask the student with the “Alisha Denzel” sign to tape the sign several inches to the right of
the sign labeled “Tyrone Washington.” Draw a line from “Tyrone Washington” to “Alisha
Denzel.”
From whom did Alisha Denzel buy electrical supplies, cabinets, and lumber?
Barbara Flowers, Thomas Collier, and Michael Sutter.
Have the students with the “Barbara Flowers,” “Thomas Collier,” and “Michael Sutter” signs
tape the signs several inches above the “Alisha Denzel” sign. Draw a line from “Alisha
Denzel” to “Barbara Flowers,” from “Alisha Denzel” to “Thomas Collier” and from “Alisha
Denzel” to “Michael Sutter.”
Who did Alisha Denzel hire to help with the electrical and carpentry work?
Suzanne Jones, Electrician, and Andrew Smith, Carpenter.
Have the students with the “Suzanne Jones” and “Andrew Smith” signs tape the signs
several inches above the “Alisha Denzel” sign. Draw a line from “Alisha Denzel” to
“Suzanne Jones” and from “Alisha Denzel” to “Andrew Smith.”
From whom did Mr. Washington buy paint and wallpaper?
Juan Miller.
Have the student with the “Juan Miller” sign tape the sign near the “Tyrone Washington”
sign. Draw an arrow from “Tyrone Washington” to “Juan Miller.”
From whom did Mr. Washington buy window treatments?
Tom Andrews.
Have the student with the “Tom Andrews” sign tape the sign several inches above or below
the “Tyrone Washington” sign. Draw an arrow from “Tom Andrews” to “Tyrone
Washington.”
From whom did Mr. Washington buy ceramic tile?
Becky Thomas.
Have the student with the “Becky Thomas” sign tape the sign several inches above or below
the “Tyrone Washington” sign. Draw an arrow from “Becky Thomas” to “Tyrone
Washington.”
Whom did Becky Thomas contact to install Mr. Washington’s floor?
An installer.
Write “Installer” on a blank piece of paper. Tape the paper several inches to the right of
the “Becky Thomas” sign. Draw a line from “Becky Thomas” to “Installer.”
From whom did Mr. Washington buy appliances?
Martha Cohan.
Have the student with the “Martha Cohan” sign tape the sign near the “Tyrone Washington”
sign. Draw an arrow from “Tyrone Washington” to “Martha Cohan.”
Who bought lunch at Yolanda Lovell’s restaurant?
Alisha Denzel, Andrew Smith, and Suzanne Jones.
Place the “Yolanda Lovell” sign near the “Alisha Denzel,” “Andrew Smith” and “Suzanne
Jones” signs. Draw lines from “Yolanda Lovell” to “Alisha Denzel,” “Andrew Smith,” and
“Suzanne Jones.”
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Check for Understanding

Tyrone Washington received the loan, but the loan had an economic impact on
others. The other people received income or money for their services.

Draw a diagram (such as the one below) that explains the economic impact from Mr.
Washington receiving a loan from the bank.
Check for Understanding

How might that character make additional connections to other characters in the
play? How might those connections affect the community?
Rubric
2 – The response gives a valid explanation with an accurate and relevant effect.
1 – The response gives a valid explanation with inaccurate, irrelevant, or no effect.
14
Check for Understanding
The population of this town has increased by 2,000 in the past year.
How might a bank help one of these businesses meet the increased demand for its goods
and services? Use one of the businesses from the town map to explain your answer.
Rubric
2 – This response provides a valid explanation with an accurate and relevant example.
1 – This response provides a valid explanation with an accurate and relevant example.
This item asks students to explain how a bank could help one of the businesses in a town
meet the increased demand for its goods and services that might result from the increase in
population. The item gives the student specific information in the graphic about the town,
and the student uses this information and knowledge about the role of banks in the
economy to answer the question.
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