What Is A Bank

Learning About Money

"What is a bank?" may seem a simple enough question - until you ask your child for the answer.

Regardless of whether you're talking to a young child or whether you're talking to a teen, you're likely to get any number of befuddled responses. But understanding the function of banks, and more importantly, the benefits they provide, is crucial for your child's financial literacy and future success.

Undoubtedly, most children's first experience with a bank is having their own piggy bank. Then, most likely, their next experience is associating trips to the bank with getting a lollipop.

These are positive early experiences, to be sure. But they don't adequately answer the question, "What is a bank?"

So What is a Bank Anyway?

But maybe your kid is the one asking you about banks.

No problem. Explaining what a bank is to your child is best accomplished by listing the benefits a bank provides in language that's appropriate to his or her age and development.

You could rattle off all the services a bank provides, but it will be more effective if you take a step back and really consider the structural benefits of banks.

In short, a bank is a place that helps you:

Empowering Your Child's Banking Relationship

I deliberately constructed the list above in terms of how a bank's individual services and products can benefit the banking consumer.

I think it's crucial that you frame the banking industry in terms of the benefits they provide, and more importantly, showing how they "help" you achieve your financial goals.


Getting kids used to the idea that banks can be their partners is very empowering.

Many adults who lacked that empowerment as children, lack it still today. They're the ones who are intimidated by banks, who feel ill at ease in financial situations, who find themselves making poor financial choices.

Now clearly, the banking industry's primary motivation is profit, and their best interests and those of their customers aren't always the same.

But empowering a child today produces an adult in the future with the financial sophistication and confidence to recognize what his or her best interests really are.