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When it comes to prepaid debit cards for teens and kids, there are few brands as well known as Greenlight card.

From its low monthly fee, to its feature-filled product offering or its ease of use, Greenlight is a great option for parents looking to teach their children about responsible financial habits and how money works in the real world.

However, just because Greenlight stands atop the debit card for kids market doesn’t mean it is always your best choice. Other prepaid cards offer similar features at different price points better adjusted to your needs and situation.

So, if you don’t want your child using a Greenlight card right out of the gate, there are several Greenlight alternatives that might be better suited to your needs!

In this article we’ll take a look at some of these alternatives to Greenlight and help you decide which is best for your family.

What are Prepaid Debit Cards for Kids?


investing younger

A prepaid card is a type of payment card that can be loaded with funds in advance and then used to purchase goods or services without incurring debt from the issuer.

The most common type of prepaid cards is a prepaid debit card (which acts like making bank account withdrawals when purchasing goods and services).

Prepaid cards for a child allow you to avoid non-sufficient funds fees or overdraft charges because they can only spend what they have on the card.

What is the Greenlight Debit Card for Kids?


greenlight card

The Greenlight app offers a feature-filled financial platform meant to help parents teach their kids important personal finance skills and build useful money habits including how to save, earn, invest, spend and give money responsibly.

The Greenlight app and prepaid card function as a purpose-built solution for families to learn about money through use of a prepaid debit card with parental controls, notifications and safety features.

Further, the Greenlight prepaid card and app offers a parent account for establishing chore plans and administering weekly allowance payments for successful completion of assigned tasks.

From there, parents can show their kids how to use the included investing platform (on a higher plan through Greenlight + Invest and Greenlight Max) to invest in stocks for kids and exchange-traded funds (ETFs).

This can show real-life lessons of compound interest and encourage children to save and invest funds regularly.

 

What are the Best Greenlight Alternatives to Consider?


Below, we’ve compiled a list of the best alternatives to Greenlight that should work for your needs. Look at each and compare which one makes the most sense for your needs.

App App Store Rating*FeesBest ForPromotions
goHenrygohenry logo4.7$3.99/mo per childAccessible customer service supportFree month trial
BusyKidbusykid logo3.7$19.99/year (1 card); additional cards $7.99/yearTeaching balanced financial approach through chores & allowance; investing fundamentalsAdditional two months free after subscribing
FamZoofamzoo logo4.6$5.99/mo per familyFinancial literacy resourcesFree month trial
Acorns Earlyacorns logo4.7$1/month - $5/monthAutomated investing in the background into diversified investments$10 sign up bonus when making first deposit at account opening; $75 bonus for receiving 2 $250 direct deposits
Axos First Checkingaxos bank logo4.7FreeBest for teens ready to learn about money management and avoid feesFree
Currentcurrent logo4.7$36/year per childInnovation and product featuresNone
Stashstash logo rebrand4.7$1/month - $9/monthEveryday people looking to start managing their finances$5 stock bonus for making a deposit of $5 or more
M1 Financem1 finance logo4.6$0 trading or automated investing; $125/year on M1 Plus subscription for custodial accountFee-free active trading and automated investing$30 sign up bonus with $1,000 deposit
Nationwide First Checkingnationwide logo4.7FreeTeens to learn essential financial skills and avoid feesFree
* Apple App Store Rating as of September 3, 2021

1. Best for Customer Service: goHenry


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  • Available: Sign up here
  • Monthly Fee: 1 month free, then $3.99 per child/mo
  • App Store Rating: 4.7

goHenry is a banking app for minors that competes with Greenlight debit card and comes paired with prepaid debit cards for parents to oversee and manage their children’s account balance.

You have an online account which comes linked to individual accounts for each of your children allowing you to lock and unlock each prepaid card.

You can manage all of the money held in each account through the company’s app and online account portal.

Each child will receive their own goHenry debit card which comes paired with parental controls you can set for your children.

What’s nice about goHenry is the ability to spend only the money available on the prepaid card, meaning you don’t need to worry about costly fees for overdrafting or accruing debt.

You open a goHenry account, receive your children’s debit cards in the mail 7-8 business days later, set up an automatic weekly allowance transfer into your children’s accounts and can set up one-off or weekly spending limits.

This will keep your children’s spending in check and you can block/unblock the card as needed as well as choose the stores where your kids can shop.

With time, the controls provided by the app and the guidance you offer can help your kids to earn, save, spend and give with good money habits.

goHenry is one of the best debit cards for kids for customer service. They offer 24/7 phone availability, email access and social media engagement, ensuring users can solve their problems quickly and with little hassle.

The product has no minimum age requirements, but recommends starting at 6 or later.

Learn more by reading our goHenry debit card for kids review.

Related: goHenry vs. Greenlight: Who Has the Best Debit Card for Teens?

2. BusyKid


busykid sign up

  • Available: Sign up here (Devices: Android, Apple iOS/iPhone/iPad)
  • Price: $19.99/year, $7.99/year for each additional card
  • App Store Rating: 3.7

Are you looking for a way to teach your kids about money through chores, earning an allowance and managing their money on prepaid debit cards for kids?

BusyKid is an award-winning, parent-approved app that educates kids about money and personal finance while competing with Greenlight debit card. It’s a way to teach your children how to manage their allowance and learn important money lessons.

The BusyKid Visa Prepaid Spend Card lets them spend their money in stores or online with just one swipe of the card. You can even set up automatic savings. The product has no minimum age requirements, but recommends starting earlier than later.

Your child will be able to earn real money by completing chores and tasks around the house each week while learning valuable financial skills like budgeting, saving and giving back.

Plus they’ll have fun earning rewards from brands like Disney on BusyKid’s weekly challenges!

BusyKid is an easy-to-use, interactive kid chore app with a debit card that will help them learn and practice important real-life lessons from the palm of their hands.

They can earn, save, invest, donate or spend – all while having fun! And it couldn’t be more simple.

Parents set chores and allowance gets directly deposited each Friday!

  • Earn – Kids can earn by completing tasks assigned by parents
  • Save – They can save up to 10% of their weekly allowance automatically
  • Donate – They can give back by donating 1% of what they make to charity
  • Spend – When they’re ready for independence, BusyKid has a Visa Prepaid Spend Card so kids are never without cash in hand.

In order to get paid, parents need to approve the Payday text message sent through the app each Thursday if your kids are to be paid on Friday.

The reloadable BusyKid Visa Prepaid Spend debit cards from BusyKid come through Visa® and there’s a $7.99 annual fee per card beyond the first that comes with the account. Other fees apply for various other actions you can take through the app and with the card as well.

Finally, BusyKid also allows children to invest their earnings through the app. Doing so requires setting up a separate Stockpile custodial account.

 

3. Best for Financial Education: FamZoo


famzoo sign up

  • Available: Sign up here
  • Monthly Fee: Free trial, then $5.99/mo per family
  • App Store Rating: 4.6

FamZoo is another competing Greenlight service for parents interested in opening prepaid debit cards to manage their children’s spending.

It works by having parents release money into their child’s account and then having the card work with a loaded balance. Money can be loaded onto the cards at any time.

FamZoo acts like a regular checking account with a linked debit card except FamZoo makes sure the account can’t be charged an overdraft fee, saving you money.

Adults are able to monitor the transactions being made. After a free trial, this app costs $5.99 per month, but the price goes down if prepaid in advance.

FamZoo is our top education choice because of its strong financial education library which improves its overall value.

The product has no minimum age requirements, but recommends starting earlier than later.

Related: Greenlight vs. Famzoo: Who Has the Best Debit Card for Kids?

4. Best for Long-Term Growth: Acorns


acorns

  • Available: Sign up here
  • Monthly Fee: Acorns Lite: $1/mo, Acorns Personal: $3/mo, Acorns Family: $5/mo
  • App Store Rating: 4.7

Acorns has become one of the most popular financial apps for minors and young adults but also offers a robust money management platform extending beyond just investing.

The full suite of offerings compares favorably with Greenlight and includes the ability to establish custodial accounts for minors to invest, regular and retirement investment accounts for adults and a bank account with linked debit card.

If you sign up for the Acorns Spend product (available under the Acorns Personal and Acorns Family plans), it creates a bank account that carries FDIC Insurance protection for up to $250,000.

Further, it uses the Acorns “Round Ups” feature which rounds up purchases to the nearest dollar, investing the difference between the transaction amount and the whole dollar. The service claims to help users invest an average of $30/month using this feature.

While not a free stock trading app, Acorns does give you the following subscription options:

  • Acorns Lite ($1/mo): Includes the Acorns Invest plan, which invests spare change through the popular “Round-Ups” feature, earns bonus investments and provides access to financial literacy articles
  • Acorns Personal ($3/mo): Everything on Acorns Lite (Investing), plus it also includes Acorns Later for tax-advantaged investment options like individual retirement accounts (IRAs) and Acorns Spend with linked debit cards for kids and teens. This service acts as your bank account, offering free withdrawals at over 55,000 ATMs nationwide and no account fee or purchase fee costs plus the ability to earn up to 10% bonus investments
  • Acorns Family ($5/mo): Everything in Acorns Personal (Acorns Invest, Later and Spend), plus Acorns Early. This allows you to open a custodial account for your child and begin investing for them as a minor.

For a limited time, the service also offers a $10 sign up bonus for people who open an account. Learn how to get free stocks and how to start investing money.

Learn more in our Acorns review.

Related: Best Acorns Alternatives: Micro-Investing Apps to Use

5. Best Free Debit Card for Teens: Axos Bank First Checking


axos bank first teen checking sign up

  • Available: Sign up here
  • Price: Free
  • App Store Rating: 4.7

First Checking by Axos Bank is the ultimate starter checking account for teens which also comes with a debit card. The world of banking can be a little scary, but not with the simplicity and power of Axos’ First Checking Account.

The account competes with Greenlight by working as a joint account between a parent or guardian and their teen, allowing for easy-to-set, customizable parental controls with a debit card dashboard.

Parents and teens can manage almost every part of the banking experience through a convenient mobile app or through the online desktop portal. Perfect for modern families who always find themselves on the go.

The First Checking account from Axos Bank gives teens their first taste of financial independence by giving them their own checking account (which pays interest!) and free debit card for teens that has daily cash withdrawals limits of $100 and purchase limits of $500.

This provides safeguards against teens getting carried away with the money held in their account.

Further, you can have up to $12 of domestic ATM fee reimbursements per month, avoid any monthly maintenance, overdraft or non-sufficient funds fees—essentially making the account free!

The account carries the highest level of security through biometric authentication techniques like fingerprint readers, voiceprints and facial recognition (pending smartphone feature availability).

The product has a minimum age requirement of 13 and will convert to an Axos Checking Account after reaching the age of majority.

 

6. Best for Product Features and Innovation: Current


current sign up

  • Available: Sign up here
  • Price: $36/teen per year
  • App Store Rating: 4.7

Current is a banking app designed for all families. The Current app allows you to track your teen’s spending in real-time, set limits on how much they can spend, and even block specific merchants on Visa-enabled prepaid cards.

You also get the peace of mind that comes with knowing their money is safe because it’s not cash. Plus, the company doesn’t charge any fees or interest for student accounts so there are no surprises when bills arrive.

Current helps parents teach teens financial responsibility while giving them a way to learn without having cash around the house and all its temptations.

That means less worry for both parents and kids! With Current, your teenager will be able to do everything from paying friends back to buying groceries at the store–all safely with only her phone!

And teens will have the opportunity to learn financial responsibility and budgeting from an early age. This will allow them to grow their savings and move one step closer to financial independence.

The product has no specifically stated minimum age requirement, but the marketing points toward a Teen Account as the target audience. Therefore, you might be able to open an account below this age for your child.

Read more in our Current review.

 

7. Best for Approaching Finances for the First Time: Stash


stash sign up

  • Available: Sign up here
  • Price: Beginner: $1 per month, Growth: $3 per month, Stash+: $9 per month1
  • App Store Rating: 4.7

Stash is a leading all-in-one financial platform which offers a mobile-friendly banking account6. With no hidden banking fees, no minimum deposit or balance requirements, and no fees for ATM withdrawals7, Stash may be a strong choice for consumers looking beyond Greenlight who prefer to do their banking and investing all through the same platform2.

Plus, you’ll earn Stock-Back Rewards® at places like Walmart, Amazon and more when you make qualified purchases with your Stock-Back® card8.

If you are a young adult, you may want to use Stash to invest money with regular automatic transfers or even “round up” purchases you make on a linked debit card so that the spare change goes to your personal portfolio.

Stash also offers financial education resources that can help you improve your financial literacy. It covers numerous topics like investing, managing and planning money.

The specifics on the Stash banking account:

  • Minimum Deposit and Balance Requirements: There’s no minimum daily balance requirement, but you do need to open a Stash Invest account to use your Stash Online Banking account7.
  • Yield: None, but you’ll earn Stock-Back® rewards on every eligible purchase made with the Stock-Back® card8.
  • Rewards and Incentives: Earn Stock-Back® rewards on every eligible debit card purchase. Earn 0.125% Stock-Back® rewards on everyday purchases and up to 5% Stock-Back® rewards on purchases with certain merchants that are eligible for Stock-Back® bonuses9. Plus, you can get paid up to two days early when you direct deposit your pay into your Stash banking account10 and enjoy access to thousands of fee-free ATM withdrawals7.
  • Possible Fees: Fees for use of out-of-network ATM withdrawals2.

For additional details and disclosures, please see the fine print at the bottom of this article.

8. Best for Financial Automation: M1 Finance


m1 finance

  • Available: Sign up here
  • Price: Free trades, M1 Plus costs $125/year
  • App Store Rating: 4.6

M1 Finance is an all-in-one super app that does it all, similar to Greenlight. The app allows you to invest, borrow and spend but also open a M1 Finance custodial account to allow your kids to use it as an investment app as well.

They even allow custodial IRAs, making this one of the best custodial accounts. The service requires you to sign up for M1 Plus to do this, however. Be sure to watch out for when the company puts this on promotion, making it free for you to try.

As for managing money and linked debit cards, if you hold money in the app’s free checking account, it comes with FDIC insurance coverage and is part of the entire safe M1 Finance financial app experience.

Read more about this app in our M1 Finance review.

 

9. Honorable Mention: Nationwide Bank First Checking


nationwide first checking sign up

  • Available: Sign up here
  • Price: Free
  • App Store Rating: 4.7 (Banking services provided by Axos)

With a highly comparable teen checking account product as Axos’ First Checking, Nationwide’s First Checking also acts as an ultimate starter checking account with debit card for teens.

We feel both deserve spots on this list of alternatives to Greenlight for their features and price point: free.

Like Axos’ First Checking, this Nationwide account works as a joint account between a parent or guardian and their teen, allowing for easy-to-set, customizable parental controls with a debit card dashboard.

Equipped with the same features and functionality, the one distinguishing feature is the ability to begin earning interest with a $0 balance in the account.

As of summer 2021, this amounts to 0.1% APY, which is a competitive rate for a simple teen checking account and debit card product.

 

What Features Should a Debit Card for Kids Provide?


Choosing the best debit cards for kids can be a tough task. They’re not just little kids anymore, and they need to learn how to manage their money as teens and eventually adults.

When you’re choosing a debit card for kids, there are many factors that you should consider like monthly fees, ATM withdrawal limits, direct deposit availability, instant money transfer, access to the child’s account for establishing spending controls, overdraft fees, rewards programs and much more.

Below, we walk through all of the features you should look for in the debit cards kids and teens can use.

App App Store Rating*FeesBest ForPromotions
goHenrygohenry logo4.7$3.99/mo per childAccessible customer service supportFree month trial
BusyKidbusykid logo3.7$19.99/year (1 card); additional cards $7.99/yearTeaching balanced financial approach through chores & allowance; investing fundamentalsAdditional two months free after subscribing
FamZoofamzoo logo4.6$5.99/mo per familyFinancial literacy resourcesFree month trial
Acorns Earlyacorns logo4.7$1/month - $5/monthAutomated investing in the background into diversified investments$10 sign up bonus when making first deposit at account opening; $75 bonus for receiving 2 $250 direct deposits
Axos First Checkingaxos bank logo4.7FreeBest for teens ready to learn about money management and avoid feesFree
Currentcurrent logo4.7$36/year per childInnovation and product featuresNone
Stashstash logo rebrand4.7$1/month - $9/monthEveryday people looking to start managing their finances$5 stock bonus for making a deposit of $5 or more
M1 Financem1 finance logo4.6$0 trading or automated investing; $125/year on M1 Plus subscription for custodial accountFee-free active trading and automated investing$30 sign up bonus with $1,000 deposit
Nationwide First Checkingnationwide logo4.7FreeTeens to learn essential financial skills and avoid feesFree
* Apple App Store Rating as of September 3, 2021

1. Direct Deposit


teenager parent managing money smartphone medium

One of the best features that may be available on debit cards for kids is direct deposit. Direct deposit means that a child’s paycheck will go directly to their account, rather than just getting an envelope from work and then handing it over to mom or dad for money management.

Direct Deposits are also good because they can help a parent manage when money should come into the bank account and when they know they need to transfer money for any expected expenses.

Some debit cards for teens even allow free early direct deposit if they open a premium checking account as well. This allows teens to get paid faster than with regular direct deposit.

Some debit cards deliver paychecks up to two days faster than traditional banks when you sign up for direct deposit.

Despite instilling a sense of delayed gratification in your children to build up their money management skills and long-term thinking, waiting for your hard earned money to hit your account shouldn’t always be something you must do.

After all, if you earned it, why should you have to wait?

2. Checking Account


Opening a kid or teen checking account can teach your children about the importance of financial responsibility and give them their first taste of managing money.

The best thing about opening up a checking account, or even just depositing money in one, is that it teaches future generations how to save responsibly and spend wisely. It will also be a great way to teach your child the importance of budgeting and how much they should save.

The issue with opening a checking account for children is that most banks require parental permission on behalf of the minor before being able to open up an account.

This means you’ll need to be around at account opening in order for them to do it themselves. Further, the best debit cards for kids also require ongoing parental involvement, like establishing parental controls and monitoring activity through a mobile app.

Checking accounts today are different than they were in the past. Now, most banks have migrated many of their important services online. As a result, you don’t need to go to a bank anymore to handle many of your money transfers, payments or other transactions.

Having a digital checking account capable of performing several necessary financial tasks has become increasingly important.

3. Savings Account


mother daughter using smartphone medium

The best debit cards for kids are not just about teaching responsibility. They’re also a savings account in disguise, since the money gets drawn from the linked checking account on the card itself and all transactions go through it.

Learning to manage this account can teach kids how to save and budget their money in the short-term but also toward longer-term goals.

However, most banks require that you have to be 13 or older to qualify for a digital account linked to a debit card.

That’s why it is important for parents or guardians with kids set to become teenagers shortly to look into bank accounts with a connected debit card now.

If the teenager has interest in learning more about how money works, saving and spending it responsibly, you should look into adding checking and savings accounts into their financial repertoire.

4. Transfer Money Instantly


The instant transfer capability is really beneficial for parents with young children. When kids are too small to have a job or your teens are too busy to go with you to the bank, it’s up to the parent or guardian to give them some spending money each week from their own pocket.

Many parents use this as a way to pay for allowance or monthly chores. The instant transfer capability eliminates the need to make a trip into an actual bank, which could be difficult for kids with no transportation or adults pressed for time.

Plus, it helps parents to see how much money they give their children and can help them determine if they should give more or less as time goes on.

This feature proves invaluable for any parent of busy young children. In addition, the instant transfer capability also helps parents who want to teach their children about financial literacy because kids learn how to work for their money and associate earnings with work- not something they receive unearned.

It’s important that kids know what it means to earn and spend money and how much they have in their account at all times. Many debit cards for kids offer this useful feature because a quick “reload” option helps parents keep on top of things even when pressed for time.

5. Mobile App


best financial apps medium

In today’s modern world, everything has gone digital. A lot of parents have found that it’s much easier to keep track of their children by using a mobile app for banking.

Teens can open their own bank account with the help of a parent, earn money to deposit into the account and then get access to the funds in order to make purchases on behalf of themselves or others- all from a mobile app.

Mobile apps also allow teens to take charge of their money because they’re responsible for keeping track of their spending and can see the balance of funds in their account at all times.

Parents are able to control how much money is available for use on a mobile app by setting parental controls that include daily limits, time restrictions, spending limits, and more- making it easy to teach kids about financial responsibility from an early age.

6. No Overdraft Fees


Most prepaid debit cards can avoid overdraft fees by declining any charges when the bank account carries an insufficient account balance.

Since overdraft fees are typically the most expensive fee associated with a bank account, this is an excellent feature to look for when choosing prepaid cards or debit cards linked to a bank account.

By having spending controls, parents can monitor their children’s spending. With apps that allow parents to take control of the card, kids can’t spend more than a predetermined amount in any time period or location.

That means not having to pay overdraft fees: if the debit card for teens won’t allow spending above a preset limit (such as the remaining account balance), kids won’t have the ability to buy something that triggers an overdraft fee.

For example, the Busykid Visa Prepaid Spend or Greenlight Mastercard Debit Card for Kids don’t have issues with overdraft fees because you can’t spend money not already loaded onto the card.

Another method for avoiding overdraft fees comes from use of prepaid debit cards for kids and teens. Much like a debit card with spending limits set above the account balance, prepaid debit cards don’t allow you to spend what you don’t have loaded on the card.

Both types of cards place guardrails on overdraft fees, protecting kids (and yourself) from costly fees and other banking account issues.

7. Low Monthly Fees


Many debit cards for kids have account subscription fees you pay to open and maintain an account with this banking provider.

These monthly fees have become a common way for banks to earn money. For example, this is how Acorns makes money.

These monthly fees (or annual fees) are commonplace given the low account balances kids and teens will likely carry in their accounts.

Banks typically make money by taking the deposits held on account and lending them to borrowers. They charge an interest rate to the borrower at a higher rate than they borrow from the depositor.

This difference, called the net interest margin, accounts for the lion’s share of bank earnings.

However, many banks have also gone after non-interest income in the form of one-off or monthly fees and services. Items like overdraft fees, account fees, account minimum balance violation fees and much more.

Because most kids will have low account balances and still require automated financial assistance for their needs, many debit cards for teens choose to charge monthly fees as an avenue for earning income.

Thankfully, many of them offer value-added services above and beyond what many traditional banks have, making them worth more to a parent’s peace of mind.

Having parental controls, setting spending limits, maintaining shared mobile app access and more provide parents with an attractive value proposition.

8. Parent Controls


parent sitting with kids laptop medium

Parental controls are one of the key features that a debit card for teens should have. This is easy to set up and can be suited to any parent’s needs by being able to choose what notifications they want, set spending limits, determine which merchants kids can visit and more.

Different transactions need different levels of monitoring, so parental controls allow customization which makes it easier on parents who want a specific view into their kids’ spending activity. You won’t get these on a free debit card for kids.

Parental controls also allow automated allowance payments, setting chores to complete, notifications for all purchases online and off and seeing spending reports.

These parental controls differentiate between a traditional prepaid card and a card offered by a traditional bank.

9. Reloadable Prepaid Debit Cards for Kids


A reloadable debit card for kids, also referred to as a prepaid debit card for kids, works to help kids make purchases without the risk of making an overdraft or encountering a fee for spending money against a balance.

Normal debit cards allow you to spend money held in the linked account while reloadable debit cards for kids only allow you to spend the money loaded onto them.

You can periodically add money to your card’s balance on reloadable prepaid cards, allowing you to spend the money when you need it.

Though, these cards in normal circumstances can charge fees for loading a card, using them or other one-off or monthly fees.

The reloadable prepaid debit cards for kids mentioned in this article can assess these monthly fees, though the circumstances matter. Some charge a cash reload fee but not for transferring funds onto the reloadable card’s balance through a bank or debit card transfer.

10. No Minimum Balance


Many parents are looking for prepaid debit cards that have no minimum balance requirement, but there’s more to it than just lowering the monthly fee. You want the best of both worlds: convenience with little-to-no maintenance required.

There can be an initial activation and issuance fee when you open up your account, which some issuers waive if you’re a student. For example, Acorns doesn’t charge monthly fees to college students with a .edu email address.

This makes Acorns an attractive money app for teens entering college or interested in knowing how to invest as a teenager.

The best cards for kids don’t have minimum balances because they often have low balances earned from chores and allowance, gifts at holidays or birthdays, or from a part-time job or other online jobs for teens.

11. Money Management Features


Spending money is one of the most stressful parts of being a kid. You have to budget your allowance, decide what all that funds mean for you in terms of buying clothes and supplies or saving up to buy something big – but it never quite seems like enough because there are so many things on your wishlist!

A bank account and linked card can help by giving you a budgeting tool to help you spend money wisely. Many offer special savings pods, categories or other terms to set aside money toward teenage money goals, both in the short-term and long-term.

Further, some money apps for kids also offer the ability to invest in stocks for kids or other teenage investing goals.

12. Parent Paid Interest


mother daughter comparing smartphone and tablet medium

Parent paid interest is a big perk of some checking accounts for kids, as it can help parents incentivize their kids to save money. It’s a way to teach your child the benefits and responsibilities that come with managing money, setting goals and saving money toward achieving them.

Parent-Paid Interest is an annual percentage rate that you set for your child’s General Savings in the Greenlight app. Their account will earn the interest on the first of each month and all you have to do is set up the money transfer into their account from your parent’s wallet.

Greenlight calculates and pays interest monthly based on the average daily balance of your child’s “Total Savings” for the previous month. This represents the total amount saved between General Savings and Savings Goals.

With Parent-Paid Interest you can choose how much interest their savings earns. If you want them to earn a lot, then you can set your Parent-Paid interest to pay up to 100% interest.

But if that is too expensive and you’d rather pay a legitimate interest rate, then you can set the amount to as low as 1%. It’s up to you!

This feature will show your kids the power of saving. You can teach them how savings grow with each month’s payment.

13. Establish Savings Goals


Closely related to parent-paid interest is the desire to establish savings goals. Saving from an early age can enforce delayed gratification, or the idea that things are more satisfying when they’re worked for and earned down the road.

There’s also something about saving that really instills responsibility in your child. They’ll start understanding what it means to budget, diversify savings, and invest for better returns.

These accounts can teach your kids how to save money by setting up savings goals, pods or categories. These envelopes of cash are a system that involves saving every time you get paid, but in different denominations and at different times of the month.

This will help them understand that they can’t just spend all their money on things they want right now because they need to save up for other priorities later.

14. Set Spending Limits


When you sign up for a bank account as an adult, chances are your spending limits will be set relatively high. You’ll start with $500 or so in the beginning and can work your way up to about $5,000 or more if you have a good credit history.

For kids however, it might not make sense to give them that much freedom during their early years before they’ve had a chance to develop strong money skills.

Parents can set spending limits by the day, week or month. For example, parents can set limits of $25 per day for kids to spend on things they want and need.

Some people have acted better with cash while others might be more comfortable using cards. Cash provides a spending limit that may help them avoid impulse purchases.

Thankfully, with the spending limits parents can set on these cards, you’ve installed a cash-based mentality in a cashless society.

15. Control Over How Kids Spend Money Online


woman looking concerned medium

A common feature of this new age of kids debit cards is the ability for parents to control how money gets spent from their accounts.

This means money spent online and offline as well by shortlisting eligible merchants or even eliminating a handful from accepting payment from the card.

16. Financial Literacy Tools


You’ll want apps that can teach, inform and grow your child’s understanding of finances. That means coming with tools for smarter spending.

Life gets busy and keeping track of your finances can be time-consuming. You don’t always have to see where and how you spend your money.

That’s why many of these apps come with information to highlight spending insights based on your history, budgeting tools to manage your money, saving categories and goals and more.

These all help with managing money, developing a sense of ownership and understanding with finances for kids. Many also come with information through financial literacy resources through videos, articles, tutorials and explainers.

Make sure you review the content covered and navigate through the available libraries of resources to select the most important topics to cover.

17. Free ATM Withdrawals


Online-only banks had an early issue to tackle: how to offer cash to their depositors without a physical location to provide ATM fee-free withdrawals?

Many leaders in the space developed a more effective solution than traditional banks: free ATM withdrawals at huge network ATMs. That means ATM fee reimbursement for tens of thousands of ATMs nationwide, not just at your bank’s.

Check that your kid’s debit card has free ATM withdrawals as well as the ability to control how much they can take out or handle by themselves.

18. Rewards Programs


By spending money on the card, you might receive rewards points to use on other expenses. These cards come with many of the same benefits as a credit card, like cash back on purchases.

As your children grow up and have more responsibility for their own expenses, these types of debit cards might be perfect to teach them how to manage money responsibly without using an expensive credit line or overdrafting.

These points can also encourage kids to save up for larger purchases, gifts or other important expenses.

19. Round Ups


begin investing young

Acorns invented it, everyone else has copied it since. “Round Up” is just a fancy term for rounding up your purchase to the next dollar amount.

The idea behind Round Ups is that small amounts of money regularly saved will eventually add up and result in much larger savings down the road.

Round Ups are a simple way to teach your kids about how compound interest works. By rounding up their purchases, they will be saving small amounts of money over time and eventually earning bigger rewards with the same strategy.

This is a great savings tool for any age group as it helps introduce them to saving and investing in an easy-to-understand format that doesn’t overwhelm or confuse them.

Kids can invest these rounded up dollars and see compound interest take off to another level.

Greenlight also offers “Round Ups” to make the most of your savings passively.

20. Ability to Donate to Charity


Also important for kids is to understand the importance of giving back. Some of these accounts allow for easy donations to charity with the swipe of a screen and push of a few buttons – with parents’ permission of course!

21. Security for Parents and Teens


Most of these digital apps allow you to pause or replace the card from your app if you misplace it or it gets stolen. Having this card becomes more secure than carrying cash and also secures transactions with EMV chips.

Further, you’ll have mobile apps that require fingerprint identification, possibly facial recognition and even multi-factor authentication for a secure banking experience.

You can keep your bank information private with your prepaid Mastercard or reloadable prepaid Visa card.

22. FDIC Coverage


All bank accounts should carry FDIC coverage, or insurance from the Federal Deposit Insurance Corporation, which protects against the loss of a depositor’s funds in case of bank failure. This is an important feature parents should look for when choosing a debit card to give their child.

23. Manages Chores and Administers Allowances


kids doing chores to earn an allowance

These debit cards for kids and teens tend to have associated apps which can assist you with managing chores and administering weekly or monthly allowances.

The apps come with tools to build, manage and employ a chore and allowance system, enabling you to assign and pay for all of your household chores.

Make sure you review the functionality of each system and whether it meets your needs. Some allow for one-off, instant payments for completed chores while others only allow for fixed or floating day weekly or monthly payments.

24. Investing Options for Realizing Compounding Returns


Some of these apps also come with added investment features through establishing associated custodial accounts and the ability to invest in stocks.

Some companies offer limited investment options by design, ensuring your child can only invest in suitable, diversified investments like index funds or ETFs.

This prevent kids, especially older ones, from stock trading in securities landing on several headlines for unusual market activity. For example, GameStop and the market mania it created in early 2021 due in large part to a Reddit subforum promoting the stock as a strong buy.

Others like Greenlight allow individual stock investing but these purchases and sales must all run through parental approval before the trade gets placed.

Further, Greenlight also limits your ability to buy and sell companies with at least $1 billion in market capitalization, potentially avoiding penny stocks and other small cap, risky names.

About the Author and Site

In 2018, I was winding down a stint in investor relations and found myself newly equipped with a CPA, added insight on how investors behave in markets, and a load of free time.  My job routinely required extended work hours, complex assignments, and tight deadlines.  Seeking to maintain my momentum, I wanted to chase something ambitious.

I chose to start this personal finance website as my next step, recognizing both the challenge and opportunity.  I launched the site with encouragement from my wife as a means to help younger generations learn how to invest, manage and plan their money with confidence.

Disclaimer

I have not been compensated by any of the companies listed in this post at the time of this writing.  Any recommendations made by me are my own.  Should you choose to act on them, please see the disclaimer on my About Young and the Invested page.

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