Lesson Note on Bank Accounts: Current Account Procedures and Cheques for SS 2

Class: Senior Secondary School 2 (SS2 / SSS2)
Term: Second Term
Week: 2
Age: 16 years
Duration: 45 minutes
Subject: Commerce
Curriculum Theme: Banking
Previous Lesson: Banking: Meaning, Types, Accounts and Bank Services.
Topic: TYPES OF BANK ACCOUNT
Subject Matter: Current account (meaning, procedures for opening a current account), factors considered before granting a loan, cheque (definition, parties to a cheque, problems in using a cheque), types of cheque (order, open, bearer, crossed cheque)

Specific Objectives

By the end of the lesson, pupils should be able to:

Cognitive Domain:

• Define a current account and outline its opening procedures.
• Explain the factors considered by banks before granting loans.
• Define a cheque and identify the parties involved in a cheque transaction.
• List common problems associated with using cheques.
• Differentiate between various types of cheques.

Affective Domain:

• Appreciate the importance of different bank accounts in financial management.
• Recognize the responsibilities associated with using cheques.
• Value the role of banks in facilitating commercial transactions.

Psychomotor Domain:

• Demonstrate the steps involved in opening a current account.
• Practice writing a simple cheque correctly.
• Identify and distinguish between different types of cheques from given examples.

Social Domain:

• Participate in discussions about banking services and their benefits.
• Collaborate with peers in role-playing banking scenarios.
• Understand the social implications of responsible banking practices.

Reference Materials

The following resources were used in planning this lesson:

• Senior Secondary Schools Education Curriculum
• State Unified Scheme of Work
• Oyebola, A. (2018). Comprehensive Commerce for Senior Secondary Schools. University Press PLC.

Instructional Materials

The teacher will teach this lesson with the aid of:

• Cheque booklets
• Bank teller slips
• ATM cards
• Charts showing different types of cheques

Rationale for the Lesson

This lesson helps pupils understand the practical aspects of banking, including opening a current account, the process of obtaining loans, and the use of cheques. This knowledge is important for managing personal finances and engaging in commercial activities effectively.

Prerequisite/Previous Knowledge

Pupils have a basic understanding of what a bank is and some general banking services.

Lesson Content/Board Summary

TYPES OF BANK ACCOUNT

Current Account

A current account is a type of bank account designed for individuals and businesses who need to make frequent transactions, such as paying bills, receiving payments, and withdrawing cash. It typically does not earn interest.

The following are procedures for opening a current account:

• Completion of account opening forms.
• Provision of valid means of identification (e.g., National ID card, Driver’s License, International Passport).
• Provision of utility bill as proof of address.
• Provision of two suitable referees who operate current accounts.
• Initial deposit as required by the bank.
• Passport photographs.

Factors Considered Before Granting a Loan

Before a bank grants a loan, it considers several factors to assess the borrower’s creditworthiness and ability to repay. These factors are often referred to as the “5 Cs of Credit”:

• Character: The borrower’s reputation, integrity, and willingness to repay debts.
• Capacity: The borrower’s ability to generate sufficient income or cash flow to repay the loan.
• Capital: The borrower’s financial strength, including their net worth and existing assets.
• Collateral: Assets pledged by the borrower to secure the loan, which the bank can seize if the loan is not repaid.
• Conditions: The economic conditions and specific terms of the loan, including the purpose of the loan.

Cheque

A cheque is an unconditional order in writing, drawn on a banker, signed by the person giving it, requiring the banker to pay on demand a sum certain in money to or to the order of a specified person or to bearer.

The following are the parties to a cheque:

• Drawer: The person who writes and signs the cheque, ordering the bank to pay.
• Drawee: The bank on which the cheque is drawn and which is ordered to pay the money.
• Payee: The person or entity to whom the payment is to be made.

The following are common problems in using a cheque:

• Dishonoured Cheque: A cheque that the bank refuses to pay, often due to insufficient funds (bounced cheque).
• Forgery: A cheque on which the drawer’s signature is counterfeited.
• Alteration: Unauthorized changes made to the amount or payee’s name on a cheque.
• Stale Cheque: A cheque presented for payment after a specified period (usually six months) from its date of issue.
• Post-dated Cheque: A cheque written with a future date, which cannot be cashed before that date.
• Mutilated Cheque: A cheque that is torn or damaged, making it difficult for the bank to process.

Types of Cheque

Cheques can be classified based on how they are paid or their features:

• Order Cheque: A cheque payable to a specific person or their order. It can only be encashed by the payee after endorsement.
• Open Cheque: A cheque that is not crossed and can be paid over the counter in cash to the payee or bearer.
• Bearer Cheque: A cheque payable to the person who presents it at the bank counter. It does not require endorsement.
• Crossed Cheque: A cheque with two parallel lines drawn across its face, usually with or without words like “A/C Payee Only” or “Not Negotiable”. It cannot be paid over the counter in cash but must be deposited into the payee’s bank account.
  • General Crossing: Two parallel lines across the cheque, with or without words like “and Co.” or “Not Negotiable”.
  • Special Crossing: The name of a bank is written between the two parallel lines, meaning the cheque can only be paid through that specific bank.

Teaching Methods/Instructional Techniques

Discussion, Lecture, Demonstration, Question and Answer, Visual Aids

Instructional Procedures

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: The teacher greets the pupils and reviews the previous lesson on general banking services. The teacher then introduces the topic “Types of Bank Account” by asking pupils about different reasons people use banks.
Pupils’ Activity: Pupils respond to the greetings, recall the previous lesson, and share their ideas on why people use banks.
Learning Point: Pupils connect previous knowledge to the new topic and understand the relevance of bank accounts.

Step 2: Current Account

Time: 10 minutes
Teaching Skill: Explanation/Demonstration
Teacher’s Activity: The teacher defines a current account and explains the step-by-step procedures for opening one, using bank forms and identification requirements as examples.
Pupils’ Activity: Pupils listen attentively, ask questions for clarification, and observe the demonstration of filling out forms.
Learning Point: Pupils understand the meaning of a current account and its opening process.

Step 3: Factors Considered Before Granting a Loan

Time: 7 minutes
Teaching Skill: Explanation/Discussion
Teacher’s Activity: The teacher explains the various factors bank managers consider before granting loans, emphasizing the importance of creditworthiness and collateral.
Pupils’ Activity: Pupils listen, contribute to the discussion, and ask questions about loan requirements.
Learning Point: Pupils learn about the criteria banks use to assess loan applicants.

Step 4: Cheque – Definition and Parties

Time: 7 minutes
Teaching Skill: Explanation/Illustration
Teacher’s Activity: The teacher defines a cheque and identifies the three main parties involved (drawer, drawee, payee), illustrating them using a sample cheque booklet.
Pupils’ Activity: Pupils listen, take notes, and identify the parties on the sample cheque.
Learning Point: Pupils understand what a cheque is and who the key players are in a cheque transaction.

Step 5: Problems in Using a Cheque

Time: 5 minutes
Teaching Skill: Explanation/Questioning
Teacher’s Activity: The teacher explains common problems associated with using cheques, such as dishonoured cheques, forgery, and stale cheques, asking pupils for their experiences or knowledge.
Pupils’ Activity: Pupils listen, share relevant experiences if any, and respond to questions.
Learning Point: Pupils are aware of potential issues when handling cheques and how to avoid them.

Step 6: Types of Cheque

Time: 6 minutes
Teaching Skill: Explanation/Classification
Teacher’s Activity: The teacher explains and differentiates between various types of cheques: order, open, bearer, and crossed cheques, using charts or drawn examples.
Pupils’ Activity: Pupils listen, take notes, and identify characteristics of each cheque type.
Learning Point: Pupils can distinguish between different types of cheques and their implications.

Step 7: Evaluation/Review

Time: 5 minutes
Teaching Skill: Questioning/Assessment
Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

1. Define a current account.
2. State three procedures for opening a current account.
3. Mention two factors a bank considers before granting a loan.
4. What is a cheque?
5. Identify the three parties to a cheque.
6. List two problems associated with using cheques.
7. Differentiate between an order cheque and a bearer cheque.

Pupils’ Activity: Pupils answer orally and in writing.
Learning Point: Pupils demonstrate understanding of the lesson.

Step 8: Conclusion

Time: 5 minutes
Teaching Skill: Summarization/Assignment
Teacher’s Activity: The teacher summarizes the key points of the lesson, emphasizing the importance of understanding different bank accounts and cheque types. The teacher then gives pupils an assignment to research other types of bank accounts.
Pupils’ Activity: Pupils listen to the summary and copy down the assignment.
Learning Point: Pupils consolidate their learning and are encouraged to explore further.

Lesson Keywords

• Current Account – A bank account for frequent transactions, usually without interest.
• Cheque – A written order to a bank to pay a specified amount from an account to a specific person or the bearer.
• Drawer – The person who writes the cheque.
• Drawee – The bank on which the cheque is drawn.
• Payee – The person or entity receiving the payment from a cheque.
• Loan – Money lent by a bank to be repaid with interest.
• Crossed Cheque – A cheque that can only be paid into a bank account, not cashed over the counter.
• Bearer Cheque – A cheque payable to whoever holds it.
• Order Cheque – A cheque payable to a specific person, requiring endorsement for transfer.

Differentiation

For pupils who grasp concepts quickly, the teacher will encourage them to research and present on more complex banking instruments like bank drafts or promissory notes. For pupils needing more support, the teacher will provide simplified diagrams of cheque components and practice worksheets for identifying cheque types and filling out basic account opening details.

Note for teachers using this lesson plan

Teachers should ensure to use real-life examples of bank forms and cheque booklets to make the lesson practical and relatable. Encourage pupils to ask questions and share their experiences with banking services. Emphasize the security aspects of using cheques and the importance of responsible financial behavior.