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Tamil Nadu (TNBSE)Class 8 Social Studies★ 5-7 marks in the TN Class 8 annual exam through book-back MCQs, fill-ups and short answers

Money, Savings and Investments

Samacheer Kalvi (TN State Board) Class 8 Social Science — Economics Chapter 1, Money, Savings and Investments. The barter system and its problems, the meaning and functions of money, the types of bank deposits (demand and time deposits), the difference between savings and investment, and investment options (stocks, bonds, mutual funds). Notes with the actual book-back questions, common mistakes and quick revision.

⏱ 16 min readEasy difficulty✓ Free · NCERT-aligned

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By the end of this chapter you'll be able to…

1Explain the barter system and its defects
2State the functions of money
3Classify bank deposits as demand or time deposits
4Differentiate savings and investment
5Identify common investment options

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Why this chapter matters

Money, Savings and Investments explains how money replaced barter and how banks, savings and investment work — practical financial literacy. The functions of money, types of deposits and savings vs investment are directly tested book-back content in the TN Class 8 exam.

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Class 7 — Production and Trade

Exchange of goods.

Money, Savings and Investments — Class 8 Social Science (Samacheer Kalvi)

TN State Board (Samacheer Kalvi) Class 8 Social Science, Economics — Chapter 1. From barter to banking — how money, savings and investment work.

1. About this lesson

This lesson explains the barter system, the functions of money, the types of bank deposits, and the difference between savings and investment.

2. The barter system and money

In the barter system, goods are exchanged for goods without money. Its main defect was the lack of a double coincidence of wants (both people must want what the other has).
Money (the word comes from the Roman "Moneta") overcame these problems. Its main functions are:
- a medium of exchange,
- a measure of value,
- a store of value, and
- a standard of deferred (future) payments.

3. Bank deposits

A commercial bank offers services to the public and companies. Its deposits are of two kinds:

Demand deposits — withdrawable on demand: the Current Account and the Savings Account.
Time deposits — kept for a fixed period: the Fixed Deposit and the Recurring Deposit.

4. Savings and investment

Savings is the part of income not spent on present consumption but kept aside for future use.
Investment is putting funds into an asset to earn a return in the future.
Common investment options: stocks (shares), bonds (debentures) and mutual funds, as well as gold, land and bank deposits.

5. Worked examples

Example 1. What was the main defect of the barter system? The lack of a double coincidence of wants.

Example 2. Name the two types of bank deposits. Demand deposits and time deposits.

Example 3. What is the difference between saving and investment? Saving sets income aside; investment puts it into an asset to earn a return.

6. Book-back questions (Samacheer Kalvi)

I. Choose the correct answer

In the barter system, goods are exchanged for — (a) goods / (b) money. Ans: (a) goods.
The word "money" is derived from the Roman word — (a) Moneta / (b) Mint. Ans: (a) Moneta.
A fixed deposit is a — (a) demand deposit / (b) time deposit. Ans: (b) time deposit.
A savings account is a — (a) demand deposit / (b) time deposit. Ans: (a) demand deposit.
Putting funds into an asset to earn a return is — (a) saving / (b) investment. Ans: (b) investment.

II. Fill in the blanks 6. The main defect of barter was the lack of a double coincidence of wants. 7. Money acts as a medium of exchange. 8. Savings is the part of income not used for present consumption.

III. Answer briefly 9. State any two functions of money. 10. Differentiate demand deposits and time deposits.

7. Common mistakes

Mistake: Treating savings and investment as the same. Fix: Saving keeps money aside; investment puts it into an asset to earn a return.
Mistake: Calling a fixed deposit a demand deposit. Fix: A fixed/recurring deposit is a time deposit; current/savings accounts are demand deposits.
Mistake: Forgetting why barter failed. Fix: Barter lacked a double coincidence of wants.

8. Quick revision

Economics Ch 1 · money, savings, investments.
Barter = goods for goods; defect = no double coincidence of wants. Money (from "Moneta").
Functions of money: medium of exchange, measure of value, store of value, standard of deferred payments.
Bank deposits: demand (current, savings) vs time (fixed, recurring).
Saving = income kept aside; investment = funds in an asset for returns (stocks, bonds, mutual funds).

Key formulas & results

Everything you need to memorise, in one card. Screenshot this for revision.

Barter

goods for goods; defect = no double coincidence of wants

Money solved this.

Functions of money

medium of exchange · measure of value · store of value · deferred payments

Four functions.

Bank deposits

demand (current, savings) vs time (fixed, recurring)

Two types.

Savings vs investment

income kept aside vs funds in an asset for returns

Stocks, bonds, mutual funds.

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Common mistakes & fixes

These are the exact errors that cost students marks in board exams. Read them once, save yourself the trouble.

WATCH OUT

✗ Treating savings and investment as the same

✓ Saving keeps money aside; investment puts it into an asset to earn a return.

WATCH OUT

✗ Calling a fixed deposit a demand deposit

✓ A fixed/recurring deposit is a time deposit; current/savings accounts are demand deposits.

WATCH OUT

✗ Forgetting why barter failed

✓ Barter lacked a double coincidence of wants.

NCERT exercises (with solutions)

Every NCERT exercise from this chapter — what it covers and how many questions to expect.

Choose the correct answer

Book-back MCQs on barter, Moneta, deposit types and investment.

Questions

Fill in the blanks

Double coincidence of wants, medium of exchange and savings.

Questions

Answer briefly

Functions of money, demand vs time deposits.

Questions

Practice problems

Try each one yourself before tapping "Show solution". Active recall > rereading.

Q1EASY· MCQ

In the barter system, goods are exchanged for ____.

▶ Show solution

goods.

Q2EASY· MCQ

A fixed deposit is a ____ deposit.

▶ Show solution

time.

Q3EASY· MCQ

Putting funds into an asset to earn a return is ____.

▶ Show solution

investment.

Q4EASY· Fill in the blanks

The main defect of barter was the lack of a ____.

▶ Show solution

double coincidence of wants.

Q5MEDIUM· Answer briefly

State any two functions of money.

▶ Show solution

Money acts as a medium of exchange and a measure of value (also a store of value and a standard of deferred payments).

Q6MEDIUM· Answer briefly

Differentiate demand deposits and time deposits.

▶ Show solution

Demand deposits (current and savings accounts) can be withdrawn at any time on demand; time deposits (fixed and recurring deposits) are kept for a fixed period and usually earn higher interest.

5-minute revision

The whole chapter, distilled. Read this the night before the exam.

•Economics Chapter 1 of Samacheer Kalvi Class 8 Social Science.
•Barter = goods for goods; its defect was the lack of a double coincidence of wants.
•Money (from 'Moneta') is a medium of exchange, measure of value, store of value and standard of deferred payments.
•Bank deposits: demand (current, savings) and time (fixed, recurring).
•Savings = income kept aside; investment = funds put into an asset for returns.
•Investment options: stocks, bonds, mutual funds (also gold, land, deposits).

Tamil Nadu (TNBSE) marks blueprint

Where the marks come from in this chapter — so you can plan your prep.

Typical chapter weightage: 5-7 marks across book-back MCQ, fill-ups and short answers

Question type	Marks each	Typical count	What it tests
MCQ / Fill	1	3-5	Barter, money, deposits
Short Answer	2-3	1-2	Functions of money, deposit types
Application	2	1	Savings vs investment

Prep strategy

Learn the defects of barter
Memorise the four functions of money
Classify deposits as demand or time
Separate saving from investment

Where this shows up in the real world

This chapter isn't just an exam topic — it lives in the world around you.

Financial literacy

Helps you manage money, banking and savings wisely.

Future planning

Saving and investing build security for the future.

Economy

Banks channel savings into productive investment.

Exam strategy

Battle-tested tips from teachers and toppers for this chapter.

Define barter and its defect
List the four functions of money
Classify each deposit type correctly
Contrast saving and investment

Going beyond the textbook

For olympiad aspirants and curious learners — topics that build on this chapter.

Explain how interest makes a recurring deposit grow over time.
Compare the risk and return of a fixed deposit and a share.

Where else this chapter is tested

CBSE board isn't the only one — other exams test this chapter too.

TN Class 8 Annual ExamHigh

Financial Literacy / NMMSMedium

School unit testsHigh

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Questions students ask

The real ones — pulled from the Q&A community and tutor sessions.

Barter needed both people to want each other's goods (a double coincidence of wants) and made it hard to value or store wealth; money solved all this by being a common medium of exchange and store of value.

Putting money aside in a savings account is mainly saving; investment means putting funds into assets like shares, bonds or mutual funds with the aim of earning a return.

Practice more, ask doubts, find a tutor

Tamil Nadu (TNBSE) Class 8 mock tests

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Social Studies flashcards

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