One of the most important decisions that parents make for their kids is showing them how to handle their finances. Whether this means teaching them about budgeting or giving them an allowance, it’s a crucial part of a child’s development and necessary for setting up healthy financial habits for the future. Children who are given charge over their own money will learn responsibility, accountability and independence—all qualities that will serve them well as adults.

For parents skittish simply handing over the financial reins to their children without any control or oversight might consider the Greenlight Debit Card. The service operates as a prepaid card with dual apps for parents and kids that help with managing finances as a family—and giving parents controls over how their children spend money. The Greenlight card and app allows you to distribute your child’s allowance while teaching them about basic financial concepts like earning, saving, spending, investing and giving. Each plan comes with debit cards for up to five kids and offers interest like a savings account.

This family money management solution works best if you don’t deal with cash on a regular basis, live in a mobile-first world and feel comfortable paying for a monthly fee—$4.99 to start for the base plan—for this high value service.

What Is Greenlight?

Founded in 2014, Greenlight is a debit card and app designed for kids, teens, and their parents. At this time, the app has been downloaded more than 4 million times.

The card works like a regular checking account. Parents and kids can deposit funds into the account and kids spend using the debit card. However, the Greenlight card and app offer additional features to help parents teach their kids about money. For example, the account offers 1-2% interest on savings. And parents can boost that with parent-paid interest. Parents can monitor their kids’ spending, automate allowance payments, and even place store-specific limits on spending.

The card never charges ATM fees, overdraft fees, or over-limit fees either. So kids can make financial mistakes without getting dinged.

What Does It Offer?

Greenlight is a conventional prepaid debit card with a twist. The app gives parents more information and more control of their children’s spending. Parents who are interested in teaching kids about money may find these features valuable.

Instant Transfers to Kid Accounts

Money transfers from a parent account to a child account are instant and free. And that’s something that not many other payment tools offer right now.

For example, while Venmo and Cash App do support instant transfers, both charge a fee for them. And while instant transfers are free with Zelle, your child would need a bank account for you to use that service to send money to them.

Savings Rewards and Cash Back

Greenlight offers every kid a 1% yield on savings and 2% with Greenlight Max. This is a turbo-charged savings rate in today’s low-interest-rate environment. Greenlight calls these earnings “Savings Rewards” rather than “interest.”

There are other ways that the app encourages savings. For example, kids can round-up purchases to the next dollar and automatically save the change. The app also makes it easy to set savings goals and track their progress over time.

In addition to Savings Rewards, kids on the Greenlight Max plan earn 1% cash back on their debit card transactions. There are no category restrictions for the cash back, but only Greenlight Max kids receive this benefit.

Greenlight Savings Rewards and Cash Back

Parent-Paid Interest

Parents who want to further reward their children’s saving habits can pay additional interest to them. Greenlight automatically calculates the interest and pays it to the kid accounts once per month.

Teach Kids About Investing

Greenlight allows kids to buy fractional shares of stocks and ETFs (as little as $1) with no trading fees. Parents who don’t have much experience with investing can learn alongside their kids. But note that like all investment’s accounts, Greenlight Invest accounts are not FDIC insured and may lose value.

Store-Specific Spending Controls

Parents can set spending limits on stores and ATMs. If your kids struggle with mindless spending on their phone’s app store or at a certain fast-food restaurant, you can set restrictions that only apply to those specific merchants. To raise the limit, kids will have to talk with you first.

Educational App

Greenlight’s app is designed to help kids learn about money. Kids can set personal savings goals, and Greenlight will help them track towards that goal. The app also provides visibility to balances and spending habits. Parents have visibility to the app too; so, they can have data-driven discussions about spending if needed.

Is It Safe and Secure?

Greenlight is a debit card issued from Community Federal Savings Bank. The bank is FDIC insured. But as noted earlier, FDIC insurance does not apply to investments. Information on the Greenlight app is stored using bank-level encryption. Of course, hackers may still find a way to steal personally identifiable information from Greenlight. But your information is as safe as it would be with another bank.

The Bottom Line

Greenlight offers a compelling product for parents who want to teach kids about money. The investing feature is particularly impressive, since opening a brokerage can be challenging for kids. Families that won’t use the investing functionality, however, may find that FamZoo offers a better price and a better user experience. However, Greenlight is still an excellent option overall.