Mobile bank services are targeting teens

A checking account is a checking account is a checking account. At least that was the case when I was in high school and college during the 1970s.

Debit cards hadn’t been invented, nor were there credit monitoring perks and overdraft protections. I just got a box of checks and some old-fashioned advice from my parents to not overdraw the account because I’d have to bail myself out of trouble.

Today, checking accounts — especially for younger consumers — have more features and doodads than a Swiss Army knife.

Consider digital banking apps such as Current, Step, Greenlight, GoHenry, Chase First Banking and others. Not only do these mobile accounts offer financial tools geared to preteens, teens and their parents, but they offer ways to teach kids about budgeting, spending and investing.

Moreover, the accounts are FDIC protected and are generally fee friendly. Most apps also don’t have a minimum age requirement — good to know if you are shopping at the start of the school year for a digital banking service for your student.

Ted Rossman, an analyst with Bankrate. com, calls these digital banking accounts “not just the wave of the future but the wave of the present.”

He likes the idea of using technology to teach teens about money. “Younger kids respond better to bills and coins,” he said, “but for teens, technology is important.”

Perhaps your kids are already familiar with Step, since its backers include NBA superstar Steph Curry of the Golden States Warriors and actor Will Smith.

Step, which is geared to teens, was launched less than a year ago and already has about 1.5 million users. Another newer entrant is Current, which has about 3 million members and focuses more on signing up parents who can then create their kids’ account.

Both apps let parents and teens make deposits and offer no-fee checking accounts. Current does charge a $4.99 monthly fee for its premium package, which provides more budgeting and money management tools.

One advantage to Step is that its Step Card is not a traditional credit or debit card. Rather, it is a secured card, which allows young users to start building credit. With a secured card, users can only spend up to the balance in their checking account.

Greenlight is another popular choice, pitching itself as a combination banking app and debit card. Parents load money onto the card from their own Greenlight account. And as a debit card, Greenlight emphasizes, kids can’t spend what isn’t there.

Parents use Greenlight to transfer allowance money to their child’s account. Another feature allows parents to track chores.

Fees start at $4.99 per month. For an additional $7.99 per month, young account holders get access to an investing platform.

Greenlight, like the other apps, has controls on how much kids can spend and on what. In addition, parents can receive alerts whenever the debit card is used and can turn off the card, if necessary. If users are investing, parents approve every trade.

What are the downsides to these digital accounts? There aren’t many, but pay attention to fees.

Step is the only one that helps users build a credit history. While there are other ways for account holders to build credit, Rossman argues that the primary objectives for teens and young adults using these apps should be low fees, budgeting tools and other user-friendly features.

“It’s so important to teach kids about money,” Rossman said. “It’s a critical life skill, and it’s not a significant part of most school curricula. That puts the burden on parents.” Digital banking apps — used properly — just might create the teaching opportunities to get the job done.