Checking account: the home of daily money
A checking account (OW"S) is a current account: a bank account for everyday transactions.
Deposits, payments and withdrawals change the balance. A positive balance is money in the account; a negative balance, or overdraft, is debt to the bank. An overdraft may carry interest. Not all positive balances earn interest, and conditions vary between banks.
There are 200 ₪ in the account. After a payment of 70 ₪, 130 ₪ remain. A credit line is not money you received as a gift.
Identify the difference between money you have and money the bank lends you.
Bank of Israel · Checking Account ↗Check your understanding
What is an overdraft in an account?
- Savings
- A bonus from the bank
- Debt to the bank
Answer and explanation
Debt to the bank. An overdraft is a negative balance. Usually you pay interest on borrowed funds according to the terms.
Does all the money in a checking account always earn interest?
- Yes
- No, it depends on the bank and account terms
- Only on Fridays
Answer and explanation
No, it depends on the bank and account terms. You must check the terms: not every sum in a checking account earns interest.
Continue learning
What is money? — Money is a common means of payment used to buy things and compare prices.
Stock: a small piece of a company — A stock is a share of ownership in a company.
Profit and loss: reading the numbers — Profit or loss is the difference between an investment’s current value and its cost.