The most recent T. Rowe Price Parents, Kids, and Money survey reports 47% of parents talk to their kids about money at least once a week. This is a record-setting percentage, according to their 2021 survey.
It turns out the uncertainty of the past two years has inspired more parents to discuss money with their children. But, talking about money and taking action are two different things. Kids benefit the most from hands-on education, like actively following a specific stock or using their own debit card. Not sure which debit card to try?
Check out this Copper Debit Card Review to learn about one option.
What is Copper Banking?
Copper Banking is a fintech app with a prepaid debit card that provides digital banking for kids, specifically teens. Although Copper Bank is entirely online, customer deposits are FDIC insured through their banking partner, Evolve Bank & Trust.
Founded by experienced entrepreneurs and business partners Stefan Berglund and Eddie Behringer, Copper Banking utilizes an app and a debit card to help children become financially responsible.
Although the app is marketed to teens, children as young as six can have an account as long as they have their own phone.
Founders Berglund and Behringer already have experience creating a FinTech company for teens.
They’re best known for their previous start-up, Snap! Raise, a crowdfunding platform for high school teams, clubs, and more.
Using their experience combined with their passion for increasing financial literacy in teens, they founded Copper Banking.
In October 2021, Copper Banking secured an additional $9 million in seed funding after raising $4.3 million initially. This brings their total venture-backed funding to $13.3 million since last year.
This cash infusion will allow Copper banking to grow significantly over the next few quarters and reach more of their target market.
What sets Copper Banking from similar apps on the market is its focus on financial literacy. For example, embedded in the app is a feature called “Cheat Codes.” These are quick, easy to understand money lessons for your kids.
From answering questions like “What is a budget?” all the way to “What is an IPO?”, Cheat Codes help your kids learn about financial topics while they’re using the app.
Additionally, parents can work with their teens, transfer money to them, and monitor their spending to help them learn positive financial habits before leaving home.
Related: Opening a Child Bank Account with Debit Card [Kids’ Debit Card]
Who is the Copper Banking App for?
Even though very young kids can use the Copper Banking app with permission from their parents, it’s primarily teenagers between the ages of 13-18 years old.
It’s best for teenagers who are interested in learning about money and want more independence. It’s also for parents who wish to instill a sense of financial responsibility in their children as early as possible.
Parents should know that they will still have to guide their children through using the Copper Banking app. This is not a set-it-and-forget-it product. Using the app requires involved parents who want to work with their children, establish a budget, and help them create financial goals.
Luckily, the user interface is intuitive enough that people of all ages will use it easily right away.
When used regularly, this app is primarily a financial literacy tool that helps kids understand how to manage their finances by exposing them to managing money and familiarizing them with financial terms.
How Does the Copper App and Debit Card Work?
Copper Banking is a fintech app powered by a partnership with SynapseFi and Evolve Bank and Trust.
SynapseFi is a software provider, and Evolve Bank & Trust is a bank. The three of these entities together enable users to bank within the app.
As a result of this arrangement, the trio doesn’t offer a branded Copper Checking Account, only a debit card with a parent attaching a linked checking account to fund the Copper card.
In the United States, you have to be 18 years old to open a bank account on your own. So, Copper users need parent permission to open and use the account.
After verifying their identity to open an account, parents add money to the Copper Bank App by transferring funds from another bank account via online banking. This money sits in a digital wallet until parents are ready to transfer it to their children’s Copper accounts.
Parents can give money to their children as a one-time payment or a recurring payment, like an allowance.
Once children have the money in their app, they have autonomy over how to use it. For example, kids can decide to save it or spend it, and they can set up goals, like saving for a car or going on a road trip.
What are Copper Banking and Debit Card’s Features?
Copper banking has several features that set it apart from similar apps on the market today. Below are some of the main features that both parents and kids will benefit from when they become Copper Banking users.
Debit Card for Kids
The best part about Copper banking is that a Copper account teaches kids about money, and kids get a debit card to use.
There are no minimums required to open an account, nor are there hidden fees. Other than a monthly fee, a customer should only pay a fee when a transaction occurs with a third party.
For example, Copper users might have to pay when they make a withdrawal from an out-of-network ATM.
They will pay a transaction fee if they want to reload the card at a retailer through the Green Dot network.
If they want to take their card on an international trip, they might be subject to transaction fees.
Again, these fees are the results of a third party.
Related: Best Debit Cards for Teens
Parental Controls
What’s great about the Copper app is that children cannot open it without a parent. Parents are the ones in control of how much money their children get to use. Parents fund the account using the Copper wallet.
Then, they can transfer money from their bank into the Copper wallet and decide how much to allocate to their children.
Parents can always keep an eye on their children’s purchases, and they can even select to be notified every time their child uses their card.
Don’t worry if you have a lot of children. Each parent can add up to five children to their account, and there is no extra charge for additional children. Every kid receives their card for $4.95/mo, and adding more kids to the account is straightforward.
Mastercard Card Network
Copper comes with a Mastercard debit card, meaning your teens can use their debit cards anywhere Mastercard is accepted.
It’s rare to go to a store or buy something online that does not accept a Mastercard, so your teen should be more than able to utilize their cards in most situations.
Mastercard Zero Liability Protection
The benefit of having a Mastercard is that they offer Zero liability protection, and deposits are FDIC insured through Copper’s banking partner, EB&T.
Virtual Debit Card
In addition to receiving a physical card, Copper customers can also use Apple Pay or Google Pay to make purchases. This elevates Copper above other similar apps and adds significant functionality.
Copper Banking Mobile App
The app is available on both the Apple App Store and Google Play, and it’s free to download.
The interface of this financial app for teens is exceptionally user-friendly. It’s sleek, sophisticated, and has an excellent UX design that makes managing your finances easy, even if you’re starting with money management.
Transfer Money
Like most banks, it can take a couple of business days to transfer parents’ money from their linked checking account into the Copper Debit card wallet. However, once parents have funds in a wallet, they can instantly transfer money to their child’s Copper bank app.
Then, their child can use that money to spend or save towards their goals.
Allowance
Copper allows parents to create a “salary” for their kids. Essentially, this is an allowance you can quickly and easily set up in the app to help manage your teen’s spending.
Parents can either send one-time payments when their kids need them or request them. Or, they can set up recurring transfers.
For example, parents can give their children a set amount each month and clearly explain its use. This helps kids budget because if they only get $50/month, they won’t be able to get fast food with their friends every day after school.
But, they can make choices about what’s important to them, what to save for, and check to see how much money they have left each month before they buy something.
Learning how to manage money is an essential part of a teen’s financial journey. It can help them take an interest in personal finance, learn what it’s like to have checking accounts, and help them establish positive financial habits in the future.
Related: Jobs for Teens to Work Online
Savings Tools
Using the Copper Banking app, teens can set up savings goals and fund them over time. Do you want your kid to save up for their own car? Or, do you want them to pay part of their college tuition?
Copper allows teens to save money towards these goals over time.
Financial Education and Literacy Development
As mentioned previously, Copper Banking shines as a financial institution when it comes to education.
They’ve hired financial literacy experts to help develop their literacy development content, including Liz Frazier as the Executive Director of Financial Education. Frazier is the author of the book “Beyond Piggybanks & Lemonade Stands.”
They’ve also hired Lily Lapenna as a Financial Literacy Advisor, recognized by Queen Elizabeth and the World Economic Forum for her work in personal finance.
Copper Cheat Codes
When Copper teaches teens about financial literacy, you won’t find boring classroom topics or endless charts and graphs that are hard to decipher.
Instead, Copper offers what they call Cheat Codes. In their definition, Cheat Codes are “Bite-sized financial lessons to help you become a financial superstar.”
Some of the current cheat code topics include, “How do dividends work?” so your teen will learn how to start investing money in stocks.
Another great one is, “What do our taxes actually go toward?” which is perfect for your child who just got their first job and noticed a lot of deductions from their paycheck.
The Cheat Codes are organized into four different categories:
- Debt
- Budgeting
- Investing
- Savings
The answers to these Cheat Code questions come in video form, making them easily digestible. Your child can watch just a handful of these and be better informed about personal finance than many adults.
Card Limits
Although there are no account maintenance fees for these teen accounts, parents should know that there are card limits.
For example, here are some restrictions parents should understand before signing up with Copper:
- $500 Daily load limit into your Copper account for debit card funding or ACH.
- $2,000 Monthly funding limits into your Copper account for debit card funding or ACH.
- $2,000 daily spending limit.
Now, most parents likely don’t expect their child to spend more than $2,000 in one day. However, there could be a time when your college student needs emergency cash, and it’s important to know there’s a cap on what you can send them at a given moment.
Overall, though, these card limits are in line with what many other banks allow. Should your child need to withdraw cash exceeding these limits, you can always transfer funds differently, like wire transfers.
FDIC-Insured
Many people remain skeptical about using online banks, but Copper offers FDIC insurance on funds held in the Copper Banking system of accounts.
Although Copper is a fintech app—not a bank—they still have FDIC insurance through a partnership with EB&T. This ensures all of the money in your Copper account comes FDIC insured up to $250,000.
ATM Withdrawals
There are no hidden fees with Copper, but they do caution that if you use an out-of-network ATM, that bank might charge a fee to use it. However, Copper card users can utilize Allpoint or Moneypass ATM networks, which have 55,000 ATMs nationwide.
If you use an in-network ATM, there are no fees.
No Overdraft Fees
Continuing the trend of no fees, there are also no overdraft fees when using Copper Banking.
Direct Deposit
Both children and parents can set up direct deposit with their Copper account. So, if your child has their first job and that employer offers direct deposit, all they need is to give their employer their routing and account number to receive their paychecks in their Copper account.
To find your Copper routing and account number, visit the app, click on Settings and look for “direct deposit.” You will see all the information you need right there.
How to Open a Copper Account
There are a few steps you’ll need to take to open a Copper account.
- Download the Copper app. Enter your phone number to receive a unique verification code on your phone. Teens can also invite a parent or guardian who can grant permission to open a Copper Banking account.
- Create your own parent account. This allows you to send cash to your teen through this app.
- Sign up. Enter your information to create your Copper account. This will provide visibility into your teen’s Copper account like debit card usage, savings goals, and more.
- Approve your teen to download their app. Once cleared, your teen can download their teen account app.
- Enter your address to receive a debit card in the mail. You will need to provide your Social Security Number (SSN) or tax identification number (TIN) to verify your identity (in compliance with the US Patriot Act)
While waiting for your Copper Banking debit card to arrive, you may use a virtual debit card on the Copper App until it arrives.
How is Copper Different than Traditional Banks?
Unlike traditional banks, Copper is a fintech app for teenagers that partners with a bank to create a teen checking account.
Because of the app’s educational tools, teens can understand how money works in the real world before they have their own accounts or need credit cards.
This method teaches kids financial responsibility and helps them establish good savings habits early on, and reduces the risk of overspending.
Most traditional banks open accounts for their customers and leave them there. Copper, on the other hand, has committed to actively teaching its customers better financial habits.
Copper bank also differs from traditional banks because they don’t charge fees. There is no minimum deposit and no fees to open the account.
Compare that to other banks. The New York Times reported that banks charged $11 billion in overdraft fees in 2019. Additionally, only “Nine percent of account holders paid 84 percent of the overdraft fees.” This is not the case with Copper.
In many ways, Copper is teaching the next generation what they should expect when it comes to banking services.
If Copper Banking is their first experience with a checking account and debit card, they’ll be less likely to partner with a bank that expects a minimum deposit or charges monthly fees in the future.
How Does Copper Banking Earn Money?
Copper Banking avoids charging an account maintenance fee or monthly service fee through tapping into debit card interchange fees to fund their service.
Copper Banking Review
Copper Banking is an excellent choice for choosing a debit card and savings account for kids. Their partnership with EB&T means your money is safe and FDIC insured. And their commitment to financial literacy sets them apart from the crowd.
With Copper banking, teens and parents can work together to manage money, pay allowances, and build savings goals. Parents can also use the app to reward good behaviors and transfer money with ease when their kids need it.
Keep in mind that a Copper account is not a checking account but a prepaid debit card without overdraft charges or the requirement to carry a minimum balance.
The debit card pays a negligible amount of interest but can earn rewards by inviting friends and completing specific objectives to build intelligent financial habits.
Copper Banking: An Excellent Choice for Banking for Kids
Overall, Copper Banking offers a compelling value proposition for parents interested in looking for a helpful teen banking application that teaches financial literacy and provides a valuable suite of features.
If parents would instead prefer a free personal checking account with a debit card for kids, they’d be better off looking at a traditional banking product like the Chase First Banking account.
Likewise, if they want a debit card for kids with more powerful spending controls, stock trading app capabilities, and card design customization, they might opt for a paid option like the Greenlight Card.
The price point for Copper Banking is right and takes concrete steps to place financial education front and center with their product.
Signing up for a card to empower teenagers to learn more about earning, saving, and managing their own money might be worth a try with Copper Banking. Consider opening a banking app for teens and parents to work together to normalize smart money decisions.
