Let’s face it. Our kids spend more time on smartphones than we would like. Rather than fight this losing battle on smartphone apps, parents can embrace Greenlight cards and apps which provide substantial value for their kids and make the experience more fun.
Kids and teens become more independent using a prepaid debit card managed by their parents, learning to manage their money. Through Greenlight, parents can play a significant role in exposing their kids to financial literacy and investing.
The company has been expanding its offerings to the family, providing exclusive access to its investment platform to parents wanting to set up investment accounts for their kids’ financial future.
Mutually Beneficial For Parents And Kids
Greenlight, an Atlanta-based fintech company, has a feature-rich platform that is mutually beneficial for families and their children seeking ways to help their kids learn how to manage finances, chores, and trade-offs when budgeting, saving, spending, and investing.
Studies show that the earlier parents provide children with opportunities for financial responsibility, the more children are accountable for how they use their money. They can get a jumpstart in financial capability, confidence, and independence.
Parents who want to put their kids on the road to financial success can benefit from Greenlight cards. Sadly, our schools don’t teach financial literacy to our children. However, parents who talk to their kids about money can benefit from Greenlight’s app to stimulate their kids’ interest in managing their money early. There isn’t a minimum age, but most kids are ten to 18 years, although, with parental guidance, younger kids could benefit from many of their features.
Our Greenlight card review will cover its plans, product features, what we like best and what could be better.
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What Is Greenlight?
Greenlight is a fintech company launched in 2014 by co-founders Tim Sheehan and Johnson Cook. The company is based in Atlanta, Georgia, and has over 3 million users.
The kids get a prepaid debit card, while parents and kids have companion Greenlight apps providing different experiences.
Kids can earn, save, spend, invest, and give with parental approval.
Parents maintain control over their kids’ spending, chores, and allowances and provide additional saving opportunities. They load the debit card through the app, have options to make transfers manually or automate weekly transfers, and provide other savings opportunities.
Surveys show that Greenlight helps families raise financially intelligent kids by offering a debit card that parents can use to pay allowances and monitor spending.
The Federal Deposit Insurance Corp. (FDIC) insures Greenlight accounts up to $250,000. On the investing side, Greenlight is registered with the U.S. Securities and Exchange Commission (SEC), a member of the Financial Industry Regulatory Authority (FINRA), and the Securities Investor Protection Corporation (SIPC) provides insurance for investing up to $500,000.
Greenlight Monthly Plans At A Glance
The three plans are: Greenlight, Greenlight + Invest, and Greenlight Max.
Monthly fees begin at $4.99 for Greenlight, go up to $7.98 for Greenlight+ Invest, and rise to $9.98 for Greenlight Max.
Resources Educational Content
Security features include FDIC insurance, SIPC insurance, and Identity theft protection
- Set goals
- Spending and saving
- Parent controls and monitoring
- 1% Savings Reward
- All Greenlight features
- Invest with as little as $1
- All Greenlight/Greenlight Invest features
- Protections for:
- Identity theft
Three Greenlight plans
Greenlight’s basic plan costs $4.99 per month and includes the following:
- Greenlight debit card covers up to five children.
- Greenlight is an educational app for parents and kids.
- Core financial tools.
- Ability to set goals.
- Additional ways to earn money.
- Parental flexible controls and monitoring of kids’ spending and saving accounts.
- The least expensive plan is to help parents teach their children desirable financial literacy skills and values.
Greenlight + Invest
This plan includes everything in the basic plan, and at $7.98 per month, adds:
- An investing platform
- You can start with $1 in the account.
- Fractional shares.
- No trading commissions or fees.
- Individual stocks and ETFs
- Parents approve each trade from the parental account.
Investing is one of the best ways to build wealth, and putting your children on that path is worthwhile. Getting your kids interested in investing is an excellent benefit. Parents or grandparents can encourage them to find their favorite companies and buy and track them. Understanding how to save money and make it work for you by investing responsibly early on is instrumental in becoming financially independent.
Greenlight Max is its premium offering at the cost of $9.99 per month, builds on the two lower-priced plans and adds these benefits:
- Identity theft protection, monitoring, and alerts.
- Cellphone Protection for items lost, stolen, or damaged.
- Protection for purchases of items paid for with the Greenlight debit card.
- Greenlight Saving Rewards of 2% and a 1% cash back for Greenlight Max.
- Priority customer support and more resources.
- The debit card is black.
At a higher cost, the Greenlight Max provides extra protection and benefits for you and your family at the price of one streaming service you may want to eliminate.
We will review Greenlight’s features in greater detail for parents and kids.
Greenlight At A Glance
- Prepaid debit cards and apps for kids and parents provide many features.
- Expanding offerings for the family, including investing for parents at no extra cost.
- Solid parental controls over spending, savings, investing.
- The feature-rich platform promotes earning, savings, spending, and giving.
- Earning boosts through round-ups, savings rewards, and cash-back rewards.
- Investing platform offers individual stocks and ETFs for kids.
- Reasonably priced monthly plans to upgrade plans.
- Excellent financial education resources.
- Monthly pricing beyond the basic plan could be high for some people.
- No discounts on spending categories like Acorns’ plan.
- Parents can’t use ATMs to deposit cash to kids’ cards.
- Investing options should expand offerings, including bonds and other securities.
The Greenlight Is Best For:
- Families who seek financial education for their young kids.
- Families want to instill their kids with increased responsibilities in a fun way.
- For kids interested in earning, savings, investing, and giving.
How To Open An Greenlight Account
Greenlight instructions to open an account are easy. Sign up online using these steps:
- Click Apply Now
- Enter your phone number and click Get Started.
- Choose: I’m the Parent or Guardian.
- Enter the verification code that’s messaged to you and click Next.
- Enter your email address, create your password, select what your kids call you, and click Next.
- Enter your child’s name and mobile number — or name and birthday if they don’t have a mobile number — then select Next or Add a child (up to five kids).
- Enter your personal information, accept the cardholder agreement and click Next.
- Set up funding and submit your application for verification.
Greenlight Product Features:
There are three plans: Greenlight with basic features, followed by Greenlight +Invest, and Greenlight Max, with more advanced features.
Prepaid Debit Card For Kids And App
Kids will get a prepaid MasterCard debit card with zero liability protection. The Greenlight banking and investing app provides different experiences for kids and parents. From the Parent Dashboard, parents can send money to their children from Parent’s Wallet. The Parent’s Wallet is a virtual wallet to store or add money for their kids.
When funding the child’s debit card, parents must connect to their bank account with a $20 minimum. There are no hidden fees like insufficient funds or overdrafts. If you lose your debit card, Greenlight will replace it for free the first time and charge $3.50 the next time it happens.
Greenlight’s cards differ from traditional debit cards because the smartphone app allows parents to control and manage how their kids spend money. Kids can get an optional customized card for a one-time $9.99 with a photo of their favorite color, pet, or scene.
Parents play an active role in their kids’ money handling by setting guardrails. They set spending rules through the parent dashboard by adding appropriate store names. Their kids can use debit cards and limit particular spending categories, including ATMs, gas stations, grocery stores, restaurants, and online gaming. You can modify the amount they spend, like $20 for online gaming or at restaurants. They need to learn to be fiscally responsible, which does not mean ordering from DoorDash for food delivery.
Parents should converse with their children about budgets and limits to spending as a valuable precursor to having a good experience. Let them know that budgeting is a responsible way to handle money. Sharing your own experiences and mistakes can help your kids respect their finances.
You can limit younger kids with “Spend Controls,” but you can be more flexible with older kids on the app by using the “Spend Anywhere” option. Parents can change settings if kids go somewhere not approved when contacting you. Parents will receive timely alerts when kids use their Greenlight cards.
One of the best Greenlight features is that parents can provide opportunities for kids to earn more money through round-ups, parents’ paid interest, chores and allowance, and saving rewards.
Round-Ups allow kids to keep the spare change rounded up to the next dollar from purchases they make at approved stores. This feature is similar to Round-Ups, originated by Acorns to build savings and investing. Rather than use this money for more purchases, kids can grow their savings.
Parents Paid Interest
Parents can pay their annual interest rate from an additional 1% to 100%, separate from the 1% savings reward. This excellent feature allows parents to set a higher amount to make the savings more visible to their kids as an incentive to earn more.
Additionally, it introduces the concept of compound interest, where kids can learn how they make interest income on interest.
According to Greenlight’s customer satisfaction survey, parents set an average of 18% as parents paid interest. That is an appropriate percentage and often linked to the Hebrew word for “life” is “chai,” which has a numeral value of 18 that happens to be significant in Judaism for giving donations and monetary gifts in that increment.
Chore Plans For Kids
Parents can establish one-time or recurring weekly chores on the app for each child, moderating the level of responsibility based on the child’s schedule and age. Popular tasks that parents choose can be “clean your room,” “wash the dishes,” “take care of your pet,” or customize their chores and reward them with money for partial completion or all-or-nothing choices.
Paying your children for chores or allowances differs among parents. Growing up, we didn’t receive money to help our parents. Instead, I recall my mom reading a Golden Book repeatedly, “We Help Mommy,” and I couldn’t wait to assist in the kitchen or elsewhere.
Kids Who Do Chores Responsibly May Have More Professional Success
After our experiences with our children, I have changed my opinion about rewarding your kids for chores. Teaching kids the virtues of work and helping others far outweigh the mercenary nature of allowances. Craig and I agree that we could have managed tasks better for our kids earlier when they were more amenable.
It is challenging to motivate my son, Tyler, to do the most manageable tasks, like emptying the dishwasher daily. On the other hand, Alex enjoys specific tasks and feels gratification from seeing clean floors and shiny tabletops.
This feature is worth the price of gold (well, not gold at over $2,000 an ounce), but at least at Greenlight’s basic monthly fee. Studies show that kids who develop responsibility for chores have more professional success, a positive outcome. As contributors to their household, they become competent, self-reliant individuals, traits that promote professional success.
Teaching responsibilities early when they are more amenable to help is invaluable. Greenlight’s customer satisfaction survey revealed that kids who earn allowance save 26% more, while 89% of parents who responded said Greenlight has helped teach their kids financial responsibility.
Kids can split their earnings between spending, savings, and giving. Upon completing chores or getting a high grade on an exam, kids will automatically receive allowance as payments they earned and experience their accomplishment. Parents cannot use ATMs to deposit cash into their children’s debit cards.
Savings Rewards And Cash Back
For the basic Greenlight plan and Greenlight +Investing, kids earn 1% savings rewards, and if you are on the Greenlight Max plan, kids earn 2% savings rewards and 1% cash back when they use the card.
How Greenlight Calculates The Interest
The calculation of interest on the savings reward monthly uses your average daily savings balance (up to $5,000) multiplied by your percent (0.01 or 0.02). It divides that by twelve months to get a monthly reward. That amount can be deposited proportionately into General Savings or any active savings goals.
For 1% cash back, Greenlight takes the total of all your posted transactions in the previous calendar month using the debit card multiplied by 0.01 for the 1% cash back payout and deposits it into the General Savings.
Parents can transfer money to their children based on their needs, chores, or rewards. Depending on your plan, funding will be instantaneous or two-three business days. To get rewards, parents must connect a verified bank account via ACH.
This feature eliminates a parent’s need to go to the bank to withdraw money and provide cash to their children. However, parents can’t yet use the ATM to deposit some money into their children’s cards.
Direct deposit is available on Greenlight debit cards. It is desirable for working kids who receive paychecks, allocate the money among their savings goals, and use it for spending. This feature introduces older kids to the paying yourself first concept so that you don’t spend your hard-earned money too quickly. Teens can set up a retirement account early and start funding it.
Developing a child’s mindset to value giving is an excellent habit. Greenlight provides a giving category that you can combine with the spending Anywhere type. You can donate outside the app using Charitynavigator.org and find your favorite place to donate money.
Investing Platform For Kids And Parents
Those who opt for Greenlight + Invest and Greenlight Max have access to the investing platform. Kids can begin to invest with just $1. There are no trading fees or commissions. The investing platform limits purchases to ETFs and individual stocks with a market capitalization of at least $1 billion, restricting purchases of micro-cap stocks that tend to be more volatile and riskier. This limit is appropriate for young and new investors. Parents can encourage their kids to buy familiar, less speculative names. Parents have to approve every transaction. Acorns is another excellent app that encourages young folks to start investing.
Significantly, Greenlight widened its investment platform for parents exclusively late last year. They made the platform available to parents at no extra cost for any plan to set up their investment accounts and their kids’ financial future, adding additional resources, including Morningstar. Greenlight will need to expand the securities from stocks to include other offerings, especially bonds.
Parents may set up a brokerage or custodial account to invest with their kids. Custodial accounts are the Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA).
Greenlight Max plan, its premium offering, provides the following protections that are desirable benefits.
Identity Theft Protection
The threat of identity theft remains high, and Greenlight provides identity monitoring and alerts that can help you stay on top of these threats for peace of mind. Young kids tend to be loyal, open to their friends, and sometimes too trustworthy to protect their privacy. Each of these features is available for each child up to five kids. Greenlight has a partnership with Experian, one of three major credit bureaus.
If you used your Greenlight debit card to purchase your cell phone and it is damaged, lost, or stolen, this protection provides reimbursements associated with replacement and repair costs up to $600 per claim. Virginia Surety company provides two claims per calendar year up to $1,000 per card, with a $25 deductible per claim. Unfortunately, this coverage is not available in New York State.
If you purchased items with your debit card in full, you have coverage for repair or replacement costs within 120 days of purchase or delivery of up to $100 per item and a total of $1,000 per year.
Greenlight Security Features
No entity can provide you with 100% guaranteed security. Greenlight security features and protections are as follows:
Every Greenlight bank account through Community Federal Savings is FDIC-insured up to $250,000. The card has an EMV chip which provides security to keep your data safe when making purchases. Debit cards require a four-digit PIN after account activation.
Investment accounts have SIPC protection up to $500,000.
Greenlight uses state-of-the-art security with advanced encryption, firewalls, and VPNs.
Greenlight Financial Education Resources
I was pleased to see that Greenlight provides many educational articles and videos on financial literacy topics: saving, spending, investments, and giving. Greenlight’s blog explains complex terminologies and trends in simple, digestible ways to please beginner investors.
They have expanded their investment resources, including Morningstar. These resources should be available to all users to entice people to upgrade to the investment plan.
What We Most Like About Greenlight
Granular Parental Controls
Parents play a substantial role in their children’s lives. Parental controls are superb, providing monitoring, transaction approvals, and flexibility to set limits for each child on the plan.
Chores And Allowance
Parents can inspire and incent their kids to increase their responsibility, customize the tasks, and link rewards for their achievements with potential long-term benefits.
There are several ways that parents and kids can boost their earnings, including parents-paid interest, round-ups, savings rewards, and cash-back.
Expands Investment Platform
It was a good move by Greenlight to broaden the investment platform for parents at no extra cost, as they encourage their site to be family-oriented. They will probably need to offer bonds and other securities.
Plentiful Financial Education Resources
Greenlight offers helpful educational content through its blog to build knowledge and confidence. These resources are available for all plans.
What Greenlight Could Do Better
Greenlight doesn’t have participating retailers that may provide discounts to those who purchase items using the Greenlight debit card. Adding that feature may strike a better balance between saving and spending.
Parents can approve stores where kids spend money, but they may need to track what kids are specifically buying, such as a receipt.
Funding The Debit Cards
The debit card is an integral part of its offering, yet parents cannot add more money to their children’s cards from ATMs.
Greenlight debit cards and apps are helpful for families who want their children to learn how to manage money through earning, saving, spending, investing, and giving. Learning these skills at an early age is invaluable to building good habits.
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With a passion for investing and personal finance, I began The Cents of Money to help and teach others. My experience as an equity analyst, professor, and mom provide me with unique insights about money and wealth creation and a desire to share with you.