Banking · Accounts · Video Lesson
Types of Bank Accounts — Checking, Savings, Money Markets & CDs
A beginner’s guide to the four main types of bank account — checking, savings, money market deposit accounts, and CDs. Students learn what each one is actually for, what to check before opening one, how deposit insurance works and what it does not cover, and why the useful question is not “which account is best?” but “what job would this account do that my current accounts don’t?”
What Students Learn
Learning objectives
- What a checking account is for, and why easy access rather than interest is its job
- How an overdraft happens, and when a bank may charge a fee for one
- How to use APY to compare savings accounts — and what a “high-yield” savings account actually is
- Why the old six-withdrawals-a-month rule is no longer federal, and what still limits a savings account
- How a money market deposit account differs from a money market mutual fund, and whether either adds anything
- How a CD’s term, maturity date and early withdrawal penalty work — and when locking money away is the wrong choice
- What FDIC and NCUA deposit insurance cover, up to what standard limit, and what they do not cover at all
- How to decide what job an account would do before opening it, instead of choosing on the advertised rate
For Teachers
How to use this lesson
This lesson sits in a banking unit after “What Is a Bank Account?” and “What Is a Savings Account?”, at the point where students stop asking what a bank account is and start asking which one they need. It works equally well as a standalone period in an adult education setting.
Its organizing idea is that each account has a job, and that most people need two of the four. The video spends as much time on when not to open a money market account or a CD as on what they are, so the lesson ends on a decision rather than a comparison table. Discussion questions and a printable quiz are below; the quiz comes with a comparison handout students keep.
Video Lesson
Watch: Understanding Bank Accounts — Checking, Savings, Money Markets & CDs
Free to watch and to use in class — about 11 minutes. The lesson plan below refers to this video.
Lesson Plan
Which account, and why — full lesson plan
Objective
By the end of this lesson, students will be able to say what each of the four main account types is for, compare accounts on APY and fees rather than on advertising, explain what deposit insurance does and does not cover, and decide what job an account would do before opening one.
Materials needed
- The “Understanding Bank Accounts: Checking, Savings, Money Markets & CDs” video (above)
- Whiteboard or projector
- The printable quiz and comparison handout (below)
Procedure
1. Warm-up — 5 minutes. Open with the video’s own first question, before any vocabulary: you get paid $800 — where should that money go? Take answers and write them on the board. Most classes will say “the bank” without saying which account, which is the gap the lesson fills.
2. Watch the video — 11 minutes. Play straight through. Ask students to note the four account types and one thing each one is for.
3. Build the comparison — 10 minutes. Four columns on the board: checking, savings, money market deposit account, CD. Fill in what each is for and what to watch out for, using the handout. Draw out the point students most often miss: a checking account’s job is access, not interest.
4. The two optional accounts — 8 minutes. Money market accounts and CDs are choices, not next steps. Ask the video’s question of each: what would this do that my current accounts don’t? Cover the two traps by name — a money market deposit account is not a money market mutual fund, and a CD’s rate is worth nothing to you if the money is your emergency fund.
5. Deposit insurance — 5 minutes. What is covered, up to the standard limit, and what is not. End on the video’s warning: an app that lets you store, send or spend money is not necessarily a bank, and some apps partner with one instead. Ask students how they would find out who actually holds their money.
6. Give the money a job — 8 minutes. Use the video’s closing prompt: if $1,000 arrived today, how much would you keep available to spend, how much would you set aside, and why? Students write their split down and defend it to a partner. There is no correct answer — the reasoning is the assessment.
7. Quiz — 10 minutes. Students complete the printable 10-question quiz. The answer key is on a separate page for teacher use.
8. Wrap-up — 2 minutes. One question: “What would have to be true before you opened a fifth account?”
Running short? Steps 5 and 6 work as homework, which brings the class period to about 45 minutes.
Assessment
The printable 10-question quiz, plus the written split from step 6 — the split shows whether a student can attach money to a purpose, which the quiz cannot test on its own.
Extension
- Read the actual terms. Students find one real savings account online and report four things: its APY, its monthly fee, its minimum balance requirement, and whether the institution is FDIC- or NCUA-insured. Compare across the class — the spread is usually the lesson.
- Is it a bank? Students pick a payment or money app they or their family use and find out, from the app’s own disclosures, who actually holds the money and what insurance applies to it.
The lesson content and video above are free to use. The printable worksheet below is available with Full Membership.
Discussion
Discussion questions
- The video says each account should have a job. Which job does your money need most right now — spending, or setting aside? How would you split $800 between the two?
- A high-yield savings account is still just a savings account. Why do you think banks advertise them as though they were a different product?
- A CD can be a poor place for an emergency fund even when it pays the best rate available. Why is the highest rate not always the best deal?
- Deposit insurance covers checking, savings, money market deposit accounts and CDs — but not stocks, bonds, mutual funds or cryptocurrency. Why does it matter to know who actually holds your money before you put it somewhere?
- Someone tells you they have four different bank accounts. What would you need to know before deciding whether that is a sensible setup or an unnecessary one?
Printable Worksheet · Full Membership
Types of Bank Accounts — Quiz, Handout & Answer Key
A printable 10-question quiz on the video, a one-page comparison handout covering all four account types and deposit insurance, and an answer key with a rationale for every item.
Related Topics
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