There are many more options available these days than the traditional banks, which do of course have accounts for children and teens. Sometimes, a parent is just busy and wants their children’s or teen’s accounts with their own main bank.
However, technology has opened options for digital disruptors such as SquareOne, Dosh and Revolut.
Digital disruptor accounts and apps with prepaid cards for children are hugely popular overseas, with the likes of GoHenry in the UK and Europe and Greenlight in the United States, which between them have signed up millions of children and their parents.
The first port of call for many parents is to open a child’s account with the big five banks. It was partly that experience that led Northlander Jovan Pavlicevic to co-found SquareOne, which is a prepaid debit card and app aimed at children.
Pavlicevic was told by his local bank branch that he’d need to go to Whangārei, a 90-minute drive away, to open an account for his 8-year-old daughter. Three trips, a mountain of paperwork and a visit to a Justice of the Peace later, Pavlicevic junior had an account. The staff just stared at Jovan Pavlicevic when he asked about online banking, for his daughter to view her account and learn about money. The other problem for many parents is that the children often can’t get an eftpos card until they’re 16 or older.
The idea with the SquareOne debit card/app is that parents can log in and interact with their child with respect to their finances. Parents can load up chores that need to be done before the pocket money is paid, and help the children set goals. The children can’t withdraw cash with the card, or buy at merchants that sell R18 goods such as vapes. SquareOne costs $4.99 per month for the whole family, which includes up to two adults and five children. Children can get an account from birth.
A recent launch in the children’s account space is Revolut’s <18, which is a prepaid card attached to a child-friendly app that enables children to manage their money under the guidance of a parent or guardian. It also has features to incentivise tasks and chores with rewards and to set savings goals. Parents receive notifications as their children spend and both online payments and ATM withdrawals can be disabled. George Grange, head of NZ at Revolut, said parents can also set limits.
“If you ask them to pick up milk on the way home, for example, you can send them the money immediately, but set a limit of [say] $5. You can get a notification when they make the purchase.” Children must be aged 6 or above.
Dosh is another money app that functions similar to a bank account. It has a teen-specific offering: Dosh for Teens, which is aimed at high school students aged 13 years and over, said co-founder Shane Marsh. It offers a fee-free account owned by the teen, not the parents. It has instant money requests and pay options between teens and parents. The teens earn 5.1% interest currently on every dollar deposited, which can be useful for learning about money.
According to Interest.co.nz the other main banks currently pay: ASB, 5%, ANZ, 3.75%, BNZ, 4.55%, Kiwibank, 4.5%, and Westpac 2.7%, on their children’s accounts. The Co-operative Bank pays 5.55%, Rabobank, 5.25% and TSB Bank 4.2%. For the record, most credit unions and building societies offer children’s and/or teen accounts.
Two new offerings aimed at children are nearing the start line in New Zealand. Booster Savvy and Debut NZ are both looking at providing savings and/or banking-like offerings for under-18s in the near future.
Children’s banking is not set and forget. The more parents and children can discuss the children’s money and financial behaviour, the more the child can learn.
Many children and teens have KiwiSaver accounts. Teenagers may even want to dabble in share investing. Having a Sharesies or Hatch kids’ account is a great way to start that journey.
