Step vs. Axos First Checking Comparison
Step Overview
- Available: Sign up here
- The Step Visa Card is a one-of-a-kind "hybrid" spending card that can help you to build your credit history via everyday purchases, even before you turn 18.
- Earn a high 5% annual rate on up to $250,000 in your Savings Goals with qualifying direct deposits.*
- Earn points that you can redeem for cash when you use your Step Visa Card at participating merchants.*
- Buy and sell fractional shares of stocks, ETFs, and Bitcoin for as low as $1.
- Send and receive money instantly, spend with Apple and Google Pay.
- Pay allowance weekly, biweekly, or monthly.
- Track your card balance from the Step App.
- Banking services, provided by Evolve Bank & Trust, are FDIC-insured for up to $250,000.
- Helps build credit
- Free secured card for kids, teens, and young adults
- High yield on money held in Savings Goals
- Free investment account for stocks, ETFs, and Bitcoin
- Fractional investing for as low as $1
- FDIC insurance
- High-yield savings only available with qualifying monthly direct deposit*
- Can't directly deposit checks into a Step account
Step Plans + Costs
Step is as free as free debit cards for teens get. There are no monthly fees, no subscription fees, and no account minimum fees. Members can use more than 30,000 fee-free ATMs. Step doesn’t even charge commissions on stock trades. Step primarily makes money through “interchange” fees paid by the merchant bank, rather than charging customers. So it’s very easy to use Step and never pay a dime.
Plan | Monthly Fee | Features Offered Under Plan |
---|---|---|
Step | N/A | - Step Card - Option to build credit - High APY on Savings Goals - Parental Controls - Allowance - Instant Transfers - Savings Roundup - Investing |
- If your child chooses to use an out-of-network ATM, Step won’t charge any fees, but the ATM operator may charge a service fee.
- Step doesn’t charge commission fees for stocks, but the government does charge a pair of small fees—a FINRA transaction activity fee (TAF) and a Security and Exchange Commission (SEC) fees—that account for a marginal percentage of your sale. Each fee is calculated as total transaction amount * $22.90 / 1,000,000, rounded up to the nearest cent, so a $1,000 trade would come out to just 4¢ in total fees.
Step Features
Step Card
The Step Card is a Visa-branded card that can be used anywhere Visa is accepted, which is … well, at 44 million merchants in 200-plus countries and territories, that’s just about anywhere credit cards are accepted. It can also be used to withdraw money for free from 30,000-plus ATMs. (Note: Withdrawals are capped at $250 within a 24-hour period and $1,000 within a 30-day period.) Remember: The Step Card is technically a secured credit card. But in practice, the Step Card acts just like a prepaid debit card. Parents fund a kid’s account, and the kid can spend up to however much is in the account—but not a penny more. Parents have several options for how to fund a Step Card, including directly through a linked bank account, a debit card, direct deposit from an employer, or payment apps like PayPal, Venmo, and Cash App. You can even deposit cash from 70,000-plus retail locations. Lastly, the card is protected by Visa’s Fraud Protection and Zero Liability guarantee. You can dispute fraudulent charges within a certain time frame to avoid having to pay for those charges.Credit Building
I said it in my Step review, and I’ll say it here: Step’s credit-building feature is by far and away the platform’s biggest draw. Virtually all secured credit cards let you build credit. But Step stands out because it works differently, it has a laundry list of features most other cards don’t have, and it’s the only such card available for users under age 18. That last point is what has made Step so popular among teens. When a parent sponsors a card for their teen, they can opt to have Step report the past two years’ worth of information—transactions, payment history, and more—to the credit bureaus when their child turns 18. Credit scores are assigned once someone turns 18, and most teens will begin with a score of under 600. But based on a Step survey, 18-year-olds who used Step for at least seven months had an average credit score of 725. That’s a massive difference that can mean easier access to (and lower financing rates on) everything from car insurance to apartment security deposits to student loans. Also helpful? The card’s Smart Pay feature automatically pays off purchases every month from funds in the deposit account. That keeps kids from ever missing a payment.Savings Goals
Lots of kids’ debit cards give different names to their de facto savings accounts: With Step, it’s called a Savings Goal. Kids can have multiple Savings Goals where they can save toward individual goals such as buying a bike or a laptop. Users earn a competitive 5% annually—compounded and paid monthly—on up to $250,000 saved in their Savings Goals. Like with your average savings account, Step’s savings yield can change depending on movements in the Federal Funds Rate, but if that happens, Step will give you 30 days’ notice before it happens. To qualify, the user must have a direct deposit of at least $500 per month, and the benefit extends for as long as the direct deposits continue. So even if your teen just holds down a summer job for three months and meets the qualifying direct deposit, they can still enjoy three months of high interest. (Other perks of making a qualifying direct deposit? Bonus points on dining, food delivery, charitable donations, specific merchants—and you can get paid up to two days early.)Savings Roundup
Step also has a round-up feature: Savings Roundup. With this feature, small purchases are rounded up to the nearest dollar figure, and that extra money is put toward a Savings Goal. Let’s say your child buys some candy for $2.75. Step will round that purchase up to $3.00 and put 25¢ toward a predetermined Savings Goal.Investing
Step gives kids the opportunity to invest in more than 1,000 stocks and exchange-traded funds (ETFs), as well as cryptocurrency. Within Step, a child needs a stock account to invest in stocks and ETFs, then a separate crypto account to invest in cryptocurrency. Parents must open and approve these accounts for their child. Also, kids can only invest in stocks or funds their parents have recommended for them. Kids can invest with as little as $1 through Step thanks to fractional shares. Also, stock and ETF trading is commission-free, but Step does charge a 2% markup on crypto prices to help cover its costs. Step’s selection of more than 1,000 stocks and ETFs is technically much smaller than the thousands of stocks and funds they could access through a traditional broker, but it’s more than enough for beginner investors—and in fact, even intermediate investors could easily build a portfolio out of Step’s holdings. The crypto offering is extremely limited, though, with only Bitcoin offered at present. Related: Best Investing Apps for Teens Under 18 [Stock Apps]Instant Transfers
Parents and other Step members can immediately send money to (and receive money from) one another with just a few taps. And while people rarely scoff at free money, you can include a note so the recipient isn’t scratching their head as to why you sent it.Parental Controls
Most parents would prefer to dip their child’s toe into the money management pool rather than throw them in. Parental controls can help. Step allows you to monitor your child’s spending and freeze the card if you fear it’s lost or stolen (or fear your kid is being too irresponsible with it).Allowance + Recurring Payments
Parents can easily set up allowance payments for their kids. You can set up recurring payments for regular chores, or one-time payments to reward your kid for spot chores, a good credit card, or otherwise doing something worth celebrating. Related: Best Allowance and Chore Apps for KidsSmooth Transition to Financial Adulthood
Step isn’t just for kids—adults can use it as well! Once your child turns 18, they can keep the same credit card number and account. Step will handle getting them appointed as the legal owner of the account and make it an independent account. Everything stays the same from the cardholder’s end. They can continue to use the card and keep building their credit history. You can sign up for Step here. Related: 30 Best Side Hustles for Teens [In-Person + Online]Axos First Checking Overview
- Available: Sign up here
- Axos Bank First Checking is a joint checking account targeted for teenagers ages 13-17 and their parents.
- Account holders get a Visa or Mastercard debit card that can be used to spend online or in person, or to withdraw cash at any ATM. (Axos provides up to $12 in monthly domestic ATM fee reimbursements.)
- No monthly maintenance, overdraft, or non-sufficient fund fees.
- The debit card's security features include account alerts, card locking, and daily transaction alerts of $100 (cash) and $500 (debit).
- Currently, you can earn up to 0.10% APY on any balance.
- Free (no monthly maintenance fees)
- ATM fee reimbursements (up to $12 per month)
- Converts to adult checking account after minor reaches age of majority
- No paired investment account
- No robust financial literacy resources
Axos First Checking Plans + Costs
If you hate fees, you’ll love Axos First Checking, which charges zero monthly fees and avoids a host of other fees. First, a look at the features:
Plan | Monthly Fee | Features Offered Under Plan |
---|---|---|
Axos First Checking | N/A | - Axos Visa or Mastercard debit card - Peer-to-peer transfers - Direct deposit - Bill pay (parents only) - $12/mo. in ATM reimbursements - APY on checking - Cash deposits - Easy account transition once child reaches adulthood |
Axos First Checking Features
Below are some of Axos First Checking’s most notable features. Some of these features are geared towards the teens, while others exist to keep parents sane.
Axos First Checking Debit Card
The Axos First Checking account comes with a free Visa- or Mastercard-branded debit card. (You can choose which one during the application.) The card can be used in stores and online wherever the chosen brand is accepted, including internationally. Perhaps the most noteworthy feature of Axos’s card is its ATM access. Axos Bank allows you to withdraw cash fee-free from 91,000-plus ATMs nationwide. And if you come across an ATM outside of Axos’ network, no problem—it will reimburse up to $12 in third-party operator fees every month. Point-of-sale transactions are limited to $500 per day, while ATM withdrawals are limited to $100 daily. Card actions such as activating, deactivating, reactivating, ordering a replacement, and sending a travel notification can all be done online. Security features include active fraud monitoring, two-step authentication, and 128-bit Secure Socket Layer (SSL) encryption.Parental Controls
Parental controls in Axos First Checking are fairly rudimentary. Parents can monitor their teen’s spending through account alerts received as real-time push notifications, emails, or text messages. They can also track transfers made from the account and lock/unlock the debit card from the mobile app and dashboard.Cash Deposits
If teens have a tip-based job or receive a lot of cash for celebrations and holidays, they might want to deposit that cash into their accounts. Fortunately, while Axos is an online-only bank, there are still ways to make cash deposits. Members can log in to the app and use the ATM locator to find ATMs that accept cash deposits. Alternatively, through Axos’ partnership with Green Dot Network®, they can deposit cash at many popular retailers, including:- ACE Cash Express
- CVS
- Dollar General
- Kroger
- Rite Aid
- Safeway
- Walgreens
- Walmart
- 7-Eleven
Peer-to-Peer Transfers
Axos lets teens make peer-to-peer payments directly from their checking accounts online. Just an email or phone number is needed to send a secure payment. So whether they need to pay a friend back for cash, fast food, or a group activity, it’s quick and easy to settle up.Earns Interest
Teens earn an interest rate of 0.10% on any money in their account—a nice bonus for doing nothing. While this is an admittedly small annual percentage yield (APY) compared to, say, a high-yield savings account or money market account, it’s still more than you’ll get on your typical checking account (which is nothing).Direct Deposit + Mobile Deposit
Teens with jobs can easily get their paychecks directly deposited into their accounts. Axos Bank has no minimum direct deposit amount to avoid fees (which isn’t the case with every financial institution). Do the teen’s grandparents love to write birthday checks? Not an issue. Axos allows free mobile deposits. You can use a mobile device or computer to send money from a check straight into a First Checking account any time of day.Bill Pay
While parents should always be covering a kid’s essential expenses, it isn’t unheard of for teens to be responsible for some of their nonessential costs. For example, a teen with a job might be asked to pay for their cell phone plan. With Axos’ free bill pay feature, parents can schedule payments from a primary account to ensure the teen doesn’t miss a cell phone payment. (Note: Only parents, not teens, can access this feature.) Bill Pay is parent use only.Easy Transition to Adulthood
Once a teenager reaches adulthood, the account can be converted into a different checking account, such as Essential Checking, Rewards Checking, or CashBack Checking. The parent or original adult on the account can then remove themselves as a joint account owner so the new adult is completely in control. You can sign up for Axos First Checking here and read more in our Axos First Checking review. Related: Best Teen Checking Accounts [Banks for Teens]Step vs. Axos First Checking: Our Editors’ Choice Is …
Step and Axos First Checking are both free accounts that help kids become financially responsible. However, when you start comparing the accounts feature for feature, Step clearly takes the lead. Step lets kids invest in stocks, ETFs, and even Bitcoin. It offers a substantially higher APY than Axos First Checking and those who enable the Round-Ups feature can save even faster. But what really puts Step ahead of Axos First Checking—and virtually all of its competitors for that matter— is that Step can help kids build a credit history. When your child eventually needs to take out loans, purchase insurance, and more, they’ll be grateful to already have credit established. Plus, Step has no minimum age, whereas you need to wait until your child is a teenager for them to open an Axos First Checking account. None of this is to say Axos First Checking isn’t a good account. It can still teach your kids about spending and saving. For teens who frequently want to reload their cards with cash, such as those with tip-based jobs, Axos could be an excellent fit. While Step offers the first two cash deposits for free, it costs $3.95 per reload after that. Meanwhile, Axos First Checking doesn’t charge anything for cash deposits (though retailers may charge a fee). Overall, Step is our winner here, as it’s packed with premium features while still being completely free. If you’re interested in trying it out, you can sign up for Step here and learn more in our Step Review.
Primary Rating:
4.7
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Primary Rating:
3.6
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Other Debit Cards for Kids to Consider
If you’re still not convinced on Step or GoHenry, you might want to look at these other highly rated options:
App | Apple App Store Rating + Best For | Fees | Promotions |
---|---|---|---|
Greenlight | ☆ 4.8 / 5 Customer rating and parental controls | Core: $4.99/mo. Max: $9.98/mo. Infinity: $14.98/mo. (Each plan supports up to 5 children.) | None |
Copper Banking | ☆ 4.9 / 5 Teen financial independence | Copper $4.95/mo., Copper + Invest: $7.95/mo. | 30 days free |
GoHenry | ☆ 4.6 / 5 Accessible customer service support | 1 month free. Individual: $4.99/mo. Family (supports up to 4 children): $9.98/mo. | 1 month free |
Revolut <18 | ☆ 4.7 / 5 Parent-paid bonuses | No monthly fees | None |
Axos First Checking | ☆ 4.7 / 5 Teens ready to learn about money management | Free (no monthly fees) | None |
*Apple App Store Rating as of April 1, 2024. |
- Best Credit Cards for Teens [Build Credit]
- 4 Best Ways to Save Money for Kids [Children’s Savings Plans]
- Should You Open a Child Bank Account with a Debit Card?
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