Simulation Activity: How Does Online Banking Work?
I found this excellent simulation to teach students about how to manage an online banking account. Please note that the simulation comes via a UK company so currency is in pounds and the date is formatted as DD/MM/YY.
Here is the user interface with online banking capabilities listed on the right hand side.
Here is one way to utilize this simulation. Have the students complete the following activities:
- What is the current balance in your savings and checking (aka personal account) accounts?
- Make the following payments from your checking account (students will need to add payee information in order to make payments):
- Your rent check for your landlord “Empire Apartments” for 1000 pounds is due immediately. Set up a payment to make this happen from your personal account. Your account number with the landlord is “1000” and Sort Code is “12 34 45.” Note that in the US, not all vendors are set up to receive electronic payments from banks, so students may need to enter addresses for their payees (the people they owe money to).
- Cable bill to CableCo for 50 pounds is due immediately. Account number is 54786 and Sort Code is 12 43 78.
- Credit card bill to MyVisa for 500 pounds is due immediately. Account number is 38975 and Sort Code is 34 67 94.
- Utility bill to MyElectric for 125 pounds is due immediately. Account number is 42298 and Sort Code is 37 32 39. [Students will get a message “Insufficient Funds” since their checking account has less than 125 pounds so they will have to transfer money from Savings to Checking account first before they do this; see #3].
- Transfer money from your Savings to Checking account to cover the Utility Bill. Be sure to emphasize to students that if this is happening on a regular basis, they may want to take a closer look at their budget. For example, if they are direct depositing 10% of their salary into their savings account with the goal of building an emergency fund, they should try and avoid transferring money out of their Savings account on a regular basis. Once they have transferred the necessary funds, they can circle back and pay their Utility bill.
- Set up a standing order for an auto payment for “CarCo Financing” for 200 pounds, which will be due one month from today. The account number is “1001” and Sort Code is “12 34 45.” For Payee Reference, students should know that many vendors require an invoice number or account information on the check also, so they should enter that information here. The student should assume that they have a 60 month auto loan which is due on the first of each month and set up a payment schedule accordingly. Good opportunity to discuss the pros/cons of automatic payments and being sure that students understand that they need to have sufficient balances in their account so they don’t overdraw their account. It is also important to build in some flex, so check arrives a week prior to its due date, since it may require time to be processed.
- Ask students why their online balance may differ from their “actual” balance? Important for them to understand that if they deposit checks or write checks that there may be a lag before it shows up online and impacts their balance which is why it is important for them to match up their online statement with any checks/deposits that are outstanding.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.