← Money Words
Interest
Money a bank pays you for keeping your money there — or money you pay for borrowing.
Three ways to explain it
Hatchlings · Ages 5–6
Thank-you money. When a bank looks after your money, every so often it adds a tiny bit more.
Fledglings · Ages 7–8
A small payment for letting a bank look after your money. Borrow money instead, and interest is what you pay for it.
High Flyers · Ages 9–10
A percentage paid on an amount of money, usually once a year. You earn it on savings and pay it on borrowing — the same idea running in opposite directions.
Where to go next
Read the whole topic: Growing It.