Banking for Tweens

January 3, 2023 8:20 AM

It's time to get my 12-year old set up with a way to handle money and payments. What's the difference between a service like Greenlight versus a regular checking/savings account at a standard bank?

I asked this question elsewhere and got lots of responses saying that their families used Greenlight to transfer money to their kids and to monitor their spending. It has a fancy app, with parent view and kid view. Sounds great!

But then I started thinking: how is that really different from a joint checking in my name and the kid's name? I am at BofA, my spouse is at Chase. BofA says kids can have a checking account in their own name at 13, as long as it's jointly owned by a parent. Are there particular security advantages either way? I am interested in a way for my child to save, and also get cash when needed and use a simple debit card. I'd like to be able to transfer funds to the child's account (ie, allowance) without having to arrange a steady flow of cash myself.

posted by Liesl to Work & Money (13 answers total)

Looks like they're doing the same thing as a bank would, perhaps with a slightly fancier app, but you have a to pay for it--and they'll give you higher rewards points if you pay more per month which sounds super scammy.

Avoid.
posted by RonButNotStupid at 8:33 AM on January 3, 2023 [1 favorite]

My local credit union has special programs for this kind of thing, yours may also.
posted by SaltySalticid at 8:44 AM on January 3, 2023 [4 favorites]

I have been using Greenlight with my 9yo since she was about six and it's great. We too never remembered to give her weekly allowance nor did we ever have cash on hand for the times we did remember.

We set up regular Saturday morning disbursements to her account which any bank can do, sure. I think a big difference is that in the Greenlight app we are able to automatically allocate her allowance by percentage between spending, savings, and giving (or whatever makes sense to you). She can view but does not yet have meaningful access to the savings or giving categories to manage this money without us, which at her age is a good thing. We set percentages in the app and the distribution takes care of itself. She checks the balance on her iPad and brings her debit card along on outings when she has enough to buy something. She has built up an extremely healthy savings account for her age in this way in just a couple years with no additional effort or monitoring on our part.

We haven't had to do this yet but you can also set debit card limits so they can only spend so much by category, or at particular stores or websites. I can see this being useful for us going forward if we want to give her bigger sums to manage her own spending on clothing or school supplies or whatever.
posted by anderjen at 8:49 AM on January 3, 2023 [4 favorites]

Best answer: Chase has an ages 6-17 account now for kids of existing chase customers, Chase First. Might be easier since one of you is already a chase customer.

My kids use the Capital One version of that. I'm a Chase customer but the product above didn't exist when I was setting them up, so I went with this one. Still, it's easy to connect an external account (my chase account) for regular scheduled allowance and ad-hoc transfers - it just takes a day or two to transfer instead of immediate. No complaints so far, they use their debit card for most things now.
posted by true at 9:03 AM on January 3, 2023 [2 favorites]

We went with a junior account at our credit union, just because it gave our kid a chance to experience interfacing with an actual bank -- talking to customer service when necessary, depositing checks, using their app, their website, etc. exactly how he'd do it on his own when he got older. Plus it was easy for me to set up regular transfers for allowance.

The account is/was set up so that it started as an offshoot of my account, and when the kid turns 18 it becomes their own separate account. When that day came for us, my kid and I talked it through and he agreed that he wanted me to still have full-access permission, because he was smart enough to acknowledge that he wasn't 100% ready to be fully responsible quite yet.

No regrets choosing this over some other system.
posted by BlahLaLa at 9:15 AM on January 3, 2023 [2 favorites]

We have a Chase First account for our son. The only downside I've found so far is that it doesn't work with Apple Pay - if he wants to use that, I have to transfer him funds separately. We didn't want to use a banking app that would cost anything - for us it seemed to defeat the purpose of money management.
posted by Mchelly at 9:18 AM on January 3, 2023

I’m not sure sure if Greenlight is the app uses with my nephew, but I know that his program has financial videos he can watch (and I believe earn money for watching) as well as limits for spending categories, like restaurants/eating out and in app purchases/games. So he could have $30 in his account and only have $10 left for games and I think this helps create some ideas around budgeting this way. I think some of those features are why they chose it over a regular bank account.
posted by raccoon409 at 10:03 AM on January 3, 2023

Greenlight let’s you get really granular with spending, like $10 for anywhere, $5 for food, $2 for Apple Store (or whatever). We’ve never been that detailed and my son kind of aged out if it. My 11yo still uses it. We use it also to divide into spend/save/give. At Capitol One I think we’d need 3 checking accounts for that?
posted by chesty_a_arthur at 10:11 AM on January 3, 2023

My neighbor uses Oh Henry which is similar to Greenlight I think. He really likes the financial education videos and you can set an amount that your kids earn each time they watch one. It also lets you encourage kids to save by offering them a higher interest rate on their “savings” account. One major difference between them is that Greenlight allows for direct deposit of paychecks and I don’t think Oh Henry does. My friend swears by it for his 3 kids (2 in high school and 1 in elementary).
posted by victoriab at 11:17 AM on January 3, 2023

Best answer: FYI Debit Card Apps for Kids Are Collecting a Shocking Amount of Personal Data
posted by oceano at 12:13 PM on January 3, 2023 [3 favorites]

I would not trade some added convenience for feeding my kid into the scammy environment of quasi-financial apps at that age. Chase just recently introduced a "junior" account you could use as an established Chase customer.
posted by praemunire at 1:07 PM on January 3, 2023 [1 favorite]

Something to think about, for maybe down the road -- my kid (who is 15) has an after-school / summer job at an organization that pays him with paper checks. To get them deposited/cashed I had to open a bank account for him (it is a subsidiary of my account -- but it has his name on it, has a checkbook, etc.) I know at some banks probably it's possible for the parents to just cash checks like that in their own account, and give the cash to the child but at my bank they said they would only do that for very young kids, and for kids his age they would only accept them with his own account.

So -- if at some point your kid might get paper checks, I think an app like Greenlight would run into limitations.
posted by virve at 5:41 PM on January 3, 2023 [1 favorite]

Another positive experience with Chase First, which my two older daughters use. They get their own debit card which they can use to buy things online and IRL, are able to create subaccounts with savings goals (adult Chase accounts don't even get this feature! been using One, now switching to Monzo...), I can set up one-time and regular transfers to their accounts and see their balances/transactions.
posted by msittig at 8:17 AM on January 4, 2023