How a Bank Works — Money Square · Investopia
What happens to your money when you put it in a bank? Investopia simulation for ages 10–17 with fictional LeoCoins; not financial advice.
What happens to your money when you put it in a bank? Step inside the vault to find out.
The Story
Banks keep people’s money safe and lend part of it to others, for things like buying a house or starting a shop. They pay interest to depositors and charge interest to borrowers.
One of the world’s oldest banks still running, the Monte dei Paschi di Siena in Italy, was founded in 1472. In Portugal, the Banco de Portugal was founded in 1846 and is now the country’s central bank, supervising others. The difference between interest charged and interest paid helps the bank cover its costs.
Key Ideas
- Deposit: Money you keep in the bank. It’s still yours.
- Loan: Money the bank lends out that must be paid back, with interest.
- Interest: The cost of borrowing money. The lender gets it; the borrower pays it.
- Deposit guarantee: In the European Union, deposits are protected up to €100,000 per person in each bank.
Step by Step
- Ana puts her savings in the bank.
- The bank keeps some and lends out the rest.
- Rui gets a loan to open a bakery.
- Rui pays the loan back bit by bit, with interest.
- Ana earns interest on her deposit.
Your Turn
Play banks with your family using buttons: one person deposits, another borrows and pays back with an extra 'interest' button.
Educational simulation with fictional LeoCoins. Not financial advice and no buy or sell recommendations. Companies in the game are invented. Real money decisions are for adults — talk to a trusted adult.
Keep exploring
Other languages
Loading MyLeoNes™…
