How Banks Are Designing Financial Education for Children

When is the right time for financial education? According to banks and other firms designing financial education for children, it’s never too early. This is the sentiment behind the growing number of savings and checking account options aimed at children and teens.

According to our recent report on youth bank accounts, financial firms like Chase, Capital One, Fidelity, PNC, USAA and Wells Fargo each offer their own versions of a family account, targeting different age ranges with unique account features. Of the accounts studied, 82% promote the availability of parental controls on accounts for high-school students, including USAA and Copper Banking, varying in the degree of parental monitoring.

For example, Chase has two options:

• Chase First Banking is a parent-owned checking account for children ages 6-17 years that includes spending controls, saving goals, allowance controls and chores; the parent takes a more hands-on approach to monitoring their child’s expenses
• Chase High School Checking is a parent co-owned account for children 13-17 years old

Why is designing financial education for children so important?

Although account options for children and teens differ in design, one of the common goals is to encourage kids to make their own financial decisions while developing financial capability. Financial capability is defined as having the knowledge, skills and access necessary to manage financial resources effectively and efficiently. The foundation for financial capability in adulthood is formulated during adolescence. Young people who develop the principles of financial capability are more likely to become financially secure adults. Adolescence is considered a pivotal time for developing financial capability, especially as financial issues become increasingly relevant with common milestones like a first job.

To create a strong foundation for financial capability during this time, kids need both financial knowledge and experiential financial learning opportunities. They should be able not only to learn about financial concepts but also to apply these concepts through hands-on opportunities.

How are banks developing their young clients’ financial capability?

Our report found that some firms leverage financial education as a means of positively influencing child and teen clients. Providing clients with resources to better understand financial concepts and access to apply such knowledge to decisions within their account, firms can help young people increase their financial capability at a formative time in their lives.

Several firms use their website, mobile app and/or email communications to promote financial education resources to their young clients as well as the parents monitoring the accounts.

On the Verizon Family Money mobile app for both the parent and child account, an Investor Education button in the top-left corner of the home screen brings up a catalog of financial education content. By promoting the articles to both account views, the firm is targeting their resources toward the child while also offering the parent the opportunity to review the content and discuss it with their child.

The dissemination of financial lessons from parent to child is an avenue for financial education that some firms prioritize.

Greenlight, which offers a banking app and debit card with parental controls for kids and teens, sends emails to the parent with content created for their child. For example, one email featured an article on how to explain inflation to kids, a podcast answering kids’ money questions and instructions on how to make the child’s mobile app a “stock market study buddy.” Greenlight leverages the parent-child relationship for information dissemination as kids are more likely to engage with financial education resources if they’re encouraged to do so by their parent. After all, parents and caregivers have a strong influence on the financial socialization of their children, particularly at younger ages.

Firms are using a variety of approaches when it comes to financial education in their family accounts. For more on how banks are encouraging young clients to improve their financial capability through financial education, read the full report on youth banking accounts (subscription required). For access, or for more on UX best practices in banking, learn how our personal banking research services can help your organization.