Kids Learn

Why save money?Why Save Money?

You have some money: maybe from Grandma or your allowance or from doing some special chores. What do you do with it? What SHOULD you do with it? Of course you could spend it. It can be fun to spend, but saving money can be fun too! Maybe you want to buy a new game system or have plenty of money to spend on your summer vacation. You need to save money for these things that cost a lot of money.

The best way to save is to put a little money away each week or month before you spend any of it. If you start out by saving, you’ll build a great habit that can last a lifetime. You can also help make our world a better place by sharing your money. You can start saving by putting money in a piggy bank at home.

Then, once you have larger amounts of cash saved, you’ll want to put some in your Treehouse Savings Club account at the bank where it is safe and will earn more money. (Interest is money the bank pays you for keeping your savings in the bank.) 

Talk to your parents or a trusted adult who knows your spending and savings habits. They can help you set goals and figure out how much you can spend, how much you should be saving, and how much you want to share. You’ll be an experienced bank customer in no time!

Have some FUN finding out how your money can grow!

Farmers & Merchants “Kid’s Calculators”: 

It will take you to a “Simple Savings Goal” calculator.

You can figure out all different kinds of savings plans with this calculator.

What Is A Savings Account?

piggy bankA savings account at a bank is a much safer place for your cash than a container at home. At Farmers & Merchants Bank, you would put your savings in a Treehouse Savings Club account which you can open with only $5 (or more)! This account allows you to make deposits whenever you want and Farmers & Merchants will pay you interest! (Interest is money the bank pays you for keeping your savings in the bank.) The more money you keep in your savings and the longer you leave the money in the account, the more money your money will make!

What Is A CD?

Certificate of Deposit (CD): A CD at a bank isn't the musical kind of CD! CD stands for Certificate of Deposit. A bank CD is a type of savings account where you agree to keep your money in the CD for a set amount of time (called the TERM of the CD). If you close your CD before the term is up, you may lose some of your interest. Banks have many different terms for their CDs. The term can be for as short as 6 months or as long as 60 months (5 years). The interest rate for a CD is usually higher than on a regular savings account.

What Is A Checking Account?

kids check bookLike a savings account, a checking account is a safe place where you can put your money (if you are 15 or older). A checking account is usually used for the "spend" part of your money. But your money will NOT grow in most checking accounts unless you add to it yourself through deposits. It won't grow because most checking accounts do not pay interest. The neat thing about a checking account is that you are able to write checks or use your Farmers & Merchants Visa® check card/ATM card to pay for things you need.

How Do I Read A Bank Statement?

Reconciling is comparing the amount you have written in your Treehouse Savings Club account passbook (the written record kept of all deposits and withdrawals for your accounts) with the balance amount on your bank statement. Every year in May an annual statement will be mailed to you. If you have an ATM (Automatic Teller Machine) card, you get a statement monthly. Your statement shows:

  1. the balance at the beginning of your statement period
  2. deposits you made into the account
  3. withdrawals you took from the account
  4. the balance at the end of the period
  5. the interest you earned. Your interest should be the last deposit listed under “Detail Transactions by Date."

On the back of the statement is a chart that can be used to help you reconcile. This chart is especially useful when reconciling a checking account, so some of the steps are only used if you have a checking account. To verify your balance, follow the steps on the chart. Ask a trusted grown-up or a bank employee to help you.

Electronic bankingElectronic Banking (if you’re age 18 or older)

Electronic Banking means banking at home using your Personal Computer with NetTeller or at ATMs (Automated Teller Machines).

NetTeller is a system that lets you perform banking activities at home, through the Internet. Online banking allows adults to perform most transactions that are usually made at the bank, such as account transfers, balance inquiries, and bill payments. You can look up your account information any time, day or night, and can be done from anywhere you have Internet access. Customers age 18 and over can sign up for NetTeller.

Using ATMs (if you're age 18 or older)

Farmers & Merchants Bank has Automated Teller Machines, or ATMs for short, at all its branch locations. ATMs are open 24 hours a day, 7 days a week. If you’re 18 or older, an ATM card allows you to withdraw money from your Treehouse Savings Account at any Farmers & Merchants ATM. You can also find out the balance in your account at the ATM.

In order to use your ATM card, you need to think of a secret code that will allow only you to use your card. This code is called a Personal Identification Number, or PIN, and you make it yourself. NEVER write your PIN down on the card or a piece of paper where someone else could find it. Your PIN should be kept a secret so that the money in your account is safe.

Frequent Savings Prizes

Every time you have made 5 deposits at the bank you will get a free gift from the Treehouse Prize Box located inside the branch vault.
There is one small catch…the Treehouse Savings Club member MUST be present to receive his or her prizes. We want club members to get acquainted with making bank deposits! Pencils, erasers, rulers and more are yours for the taking when you take the time to save. And, by saving today, you will be able to buy bigger and better things you want tomorrow!

Banking Vocabulary

Before you start exploring through this site, you will need to learn some new words. The list below has some basic words that you will need to know when talking about banking:

Account: Your account is the relationship you have with a bank or any other business. It's also a record of that relationship.

Activity: Anything that happens in your account, including deposits, withdrawals, checks paid, interest payments, and service fees.

Balance: The amount of money in an account, especially after an activity, such as a withdrawal or an interest payment. For loans, the balance is the total that you still need to repay.

Basis Point: 1/100th of a percentage point, or 1/10000th. When the Federal Reserve changes interest rates, you may hear someone talk about "25 basis points" or "50 basis points."

Budget: A plan for earning, spending and saving money over a given period of time.

Certificate of Deposit (CD): A type of account where you deposit money for a set amount of time, for example 6 months or 1 year. The interest rate on CDs is usually higher than on savings accounts.

Check: A piece of paper that transfers money from the check-writer's account to the person being paid, in place of cash.

Compound Interest: Interest that is paid or charged on interest that has already accumulated. With compound interest, your savings account earns interest on your original deposit PLUS the interest it has already earned.

Counterfeiting: Making an illegal copy of something valuable, like money, and pretending that it is real.

Credit: Money that is due to someone, or money that is added to an account. In accounting terms, the opposite of debit.

Credit Card: A plastic card, issued by a bank, which allows people to buy things without cash. Money spent on a credit card is a short-term loan from the bank, and credit card users must pay the money back over time.

Currency: The physical form of money, also called cash.

Debt: Money that is owed to someone after a loan is made. If you loan $5 to your friend, that friend has a debt owed to you.

Debit: Money that someone owes, or an amount that is subtracted from an account. In accounting, the opposite of credit.

Deposit: Money put into a bank account.

Fee: The price charged by a bank for "extra things" like traveler's checks or safe deposit boxes.

Income: Money you receive.

Interest: The fee for using money, usually a set percentage of the money. In savings accounts, the bank pays the saver interest; in loans, the borrower pays the lender interest.

Investing: Money spent to make more money. Investments in a business are called capital. You can invest in a business by buying stocks. Investing can be risky, so you should make sure you know a lot about anything you invest in.

Minting: Making money by stamping metal, to create coins.

Overdraw: To write checks against your account for more than the balance in it..

Percentage: A fraction of something, always divided by 100. One percent is 1/100th, ten percent is 10/100ths, and so on.

Period: The amount of time used to figure interest and record activity, usually one month.

Principal: An amount of money before interest is added. For a loan, it is what you owe before finance charges; for a deposit, it is the amount of money before you earn interest.

Profit: The money left over after a business pays its bills, or income minus expenses.

Register: The written record kept of all deposits and withdrawals for your account..

Service Charge: Money you pay the bank for keeping a certain type of account or, for instance, overdrawing an account.

Simple Interest: Interest that is paid only on principal, and not on the extra interest earned.

Statement: A written list sent by the bank of what you put into and take out of your account including the current balance in your account.

Term: The amount of time money is on deposit (often refers to a CD), or the length of time you have to repay a loan.

Transaction: Any change or activity in your account, such as a deposit or withdrawal.

Transfer: Moving money from one account to another.

Withdrawal: Taking money out of an account.

Yield: The amount of money you earn on an investment, figured as a percentage of the amount you invested.

205 S. Main St.     P.O. Box 1111     Timberville, VA 22853     (540) 896-8941