Banking words

Sometimes you might hear your Mum or Dad, teacher or even the people at the Bank use words when they are talking about money or banking that you’re not sure what they mean. Here are some of those words – with meanings kids can understand – so you can know what’s going on.

Understanding things that are at a bank or what is used to do banking is a very important part of learning how to be smart with your hard earned money. This section explains some of the words people use about banking. It’s never too early to know that being smart about money and saving is an important part of life.

MONEY is something that lets us buy things we want. It is made up of coins and notes. You might get money from your parents or grandparents as a gift for your birthday or other special occasions, for doing jobs around the house, or by selling things you don’t want anymore.

A BANK is a place that looks after people’s money for them and keeps it safe. It also lends money to people to help them buy things like houses.

A BUDGET is a plan on how you will spend the money you earn. It includes how much money you earn (and from where you earn it) and details what you want to spend your money on and how much you will save.

SAVING means not spending your money straight away, but putting it away so you can spend it later. Usually people put their savings in a bank account, to keep the money safe until they have enough to buy what they want.

A BANK ACCOUNT is the record your bank keeps to know how much money you have given them to mind. It has your name on it so the bank knows it is your money. You can put money in to your account when you want to save, and take it out when you need it. When you leave money in your account, the bank pays you interest. You get a bank account number for each account that you have with the bank. Bank account numbers are up to 10 numbers long at Bank of Melbourne.

A BSB NUMBER is the six digit code that identifies what bank and branch your account is at. This is mainly used when you tell other people where your bank account is. You give them the BSB number and the account number, and they can use this information to process direct deposits and other automated transfers.

INTEREST is money the bank pays you for letting them look after your money. It’s kind of like a reward for you not spending your money. The more money you put in the bank and the longer you leave it there for, the more interest you’ll get.

A TRANSACTION is something you do that changes the balance of your account. This can be either a deposit or withdrawal from your account.

A DEPOSIT is when you put money IN to your bank account. When you make a deposit, your account balance goes up.

A WITHDRAWAL is when you take money OUT of your bank account. When you make a withdrawal, your account balance goes down.

An ACCOUNT BALANCE is the amount of your money the bank is holding. Its like the "=" amount in a maths problem. For example, if you start with $5 and deposit (or add) $2, your balance is $7. If you then withdraw (or take out) $3, your balance becomes $4 (Because $7 - $3 = $4)

An ATM is a short way to say "Automated Teller Machine". It’s a special machine that has money inside it and lets the bank’s customers make cash withdrawals and check their account balances without the need to go into the branch (or Bank shop). Many ATMs also allow people to deposit cash or cheques and transfer money between their bank accounts.

An ATM CARD is a special plastic card that people use to withdraw money from their bank account using an ATM. The card has special numbers on it that tell the ATM (and the bank) what account to take the money from. People also have a PIN (or Personal Identification Number) that is like their secret password to tell the bank they say it is OK to do whatever type of transaction they are asking to be done.

A PIN (or Personal Identification Number) is like a special secret password (made up of numbers) that you input into an ATM or EFTPOS machine to tell the bank that its OK to do the transaction you are asking for. It is very important that you don’t tell your PIN to other people. If you do, they can take your money.

EFTPOS stands for "Electronic Funds Transfer at Point Of Sale" – this is just a fancy way to say you can buy things at shops and pay for them using money from your bank account directly. When you use your card (the same one you use in an ATM) and put your PIN in to the special machine at the shop, that tells the bank that you want to send the money for what you have bought to the shop keeper’s account directly (which means you don’t have to go to the bank to get the cash out beforehand).

The Detail

Have you heard a banking term that you don’t know? We can explain it in language you can understand. Email and we’ll add it to the list!