TOTAL CHILD SCHOOL, PORT HARCOURTWEEK: 3
TOPIC: Banking services
CLASS: JSS2
GENDER: MIXED
AVERAGE AGE: 12 YEARS
DURATION: 2 PERIODS (40min. for each period)
REFERENCE: WABP junior secondary business studies book 2 and
Classic business studies book 2
BEHAVIOURAL OBJECTIVES: By the end of the lesson, students should be able to:
PREVIOUS KNOWLEDGE: the students were taken to a bank in the last session and they were taught some of the activities that goes on in the bank.
Biblical Objective:
To manage financial resources wisely and responsibly in ways that honor God and serve others.
Biblical Truth:
God calls His people to faithful stewardship, integrity, and diligence in handling money and financial services.
Bible Verse:
“Whoever can be trusted with very little can also be trusted with much.” — Luke 16:10 (NIV)
LESSON CONTENT
STEP 1: MEANING OF BANK
A bank is a place where money and other valuables like will, jewelry etc are kept.
TYPES OF BANK
1. Commercial bank
2. Central bank
3. Merchant bank
4. Savings bank
5. Development bank
COMMERCIAL BANKS
Commercial banks are financial institutions which accept deposits and other valuables from the public for safekeeping with the sole aim of making profit.
STEP 2: FUNCTIONS OF COMMERCIAL BANKS
1. ACCEPTING DEPOSIT: Commercial banks accept deposits from the public for safekeeping.
2. LENDING TO CUSTOMERS: Deposits from different customers are pooled together and
given out as loans with interest to people and firms for profitable investment.
3. AGENT OF PAYMENT: Commercial banks can act as agent of payment on behalf of their
customers.
4. SAFE KEEPING OF VALUABLES: One of the functions of commercial banks is to keep
customers valuables such as jewellery, certificates, will etc
5. DISCOUNTING BILL OF EXCHANGE
This enables the creditor to be paid instantly, and the debtor is allowed a period of credit.
6. ISSUANCE OF BANK STATEMENT
At regular intervals, the bank will prepare and send bank statements to their customers to show
their transactions with them.
7. INVESTMENT AND STOCK EXCHANGE TRANSACTION
Banks act as agents for their customers in the purchase or sale of securities e.g share in the
stock exchange.
8. ISSUANCE OF TRAVELLERS CHEQUE
Travellers cheques are often issued to those travelling overseas in order to facilitate their commercial transactions.
9. FOREIGN EXCHANGE TRANSACTION
Commercial banks make foreign currencies available to their customers.
10. PROVIDE FINANCIAL ADVICE: Commercial banks encourage and advice businessmen
on the type of project they should invest their money in.
11. FACILITAT INTERNATIONAL TRADE
Commercial banks provide credits to exporters and this facilitates payment in foreign trade.
12. ACT AS EXECUTOR FOR THEIR CUSTOMERS
Commercial banks can act in the capacity to execute the will of its customers.
STEP 3: TYPES OF BANK ACCOUNT
There are three types of accounts which customers can open in a bank. These are:
1. Current Account
2. Savings Account
3. Fixed Deposit Account
CURRENT ACCOUNT: Current account is an account on which cheques are drawn.
FEATURES OF CURRENT ACCOUNT
1. Money can be withdrawn frequently.
2. Customers are entitled to the use of cheque book.
3. Payment of commission is made by the customers to the bank.
4. Holders are not entitled to interest.
5. Other people can withdraw money from the account on behalf of the customers.
SAVINGS ACCOUNT
Savings account is the type of bank account that is operated by low income earners who are
small savers.
FEATURES OF SAVINGS ACCOUNT
1. Money can only be withdrawn occasionally.
2. It attracts a favourable rate of interest.
3. Holders are issued with passbook.
4. Withdrawal cannot be made by another person on behalf of the customer.
FIXED DEPOSIT ACCOUNT
Fixed deposit account, also called time deposit is an account in which money is saved in the bank for a fixed period of time to earn interest.
Holders are entitled to highest interest than savings account.
FEATURES OF DEPOSIT ACCOUNT
1. Money is deposited for a specific period.
2. It attracts higher interest rate.
3. Notice of seven days must be given before withdrawal.
4. The customer will be issued with deposit account passbook.
STEP 4: CREDIT FACILITIES PROVIDED BY COMMERCIAL BANKS
Commercial banks act as agent of lending through the following ways:
a. LOAN: A loan is money borrowed from the bank by individuals and businesses.
b. OVERDRAFT: Overdraft is a method of credit facility in which a customer is allowed or permitted to draw a cheque more than the amount of money in his account. This type of credit facility can only be enjoyed by a current account holder.
DIFFERENCE BETWEEN LOAN AND OVERDRAFT
| LOAN | OVERDRAFT |
1. Collateral security is required 2. It attracts lower rate of interest 3. The money is repayable at a fixed time
4. A separate account called loan account is opened | Collateral security is not required It attracts higher rate of interest. There is gradual deduction from the customer’s account. No separate account is opened. |
EVALUATION: the teacher evaluates the lesson by asking the students the following questions;