Managing money is a skill that everyone needs to learn. As parents look for ways to teach their kids financial literacy, one digital bank is building a type of kid's banking account with the whole family in mind.
"Children are digitally native these days, so it just makes sense to start that early," Alyson Ahearn, general manager of high income and Under 18 accounts for Nubank, told American Banker.
Under 18 accounts allow minors to access their own debit card, make person-to-person payments, and make online debit purchases and ATM withdrawals. Parents or guardians can also request an additional credit card for their kids, sharing a portion of their limit at no extra cost and giving their kids an opportunity to build their credit score early while still having a built-in security net.
"A parent can request the additional card, and the Under 18 account holder can use a portion of the credit limit defined by the parent," Ahearn said. "The parent and the kid can then track those transactions, and the kid can use that card as a normal credit card at all merchants. It's an interesting way to start using a credit card without having the liability of the credit limit on the kid, because at the end of the day who's required to pay the bill is the parent."
A feature launched in 2024 also gives Under 18 account holders the ability to create "Caixinhas" (money boxes) for high-yield savings. This helps them learn how to save for their financial goals and participate in household financial growth.
"We've iterated on Caixinhas a lot for all our users, but the really interesting thing is the use is even higher for our under 18 users than for the overall population. And one of the really interesting things is when you look at the names that the under-18 consumers put for their Caixinhas, one of the top names is 'não sei' — in Portuguese that basically means 'I don't know.' This money box is often not for a specific purpose, but kids still understand that they need to be saving money and are creating this habit."
New parental control features introduced to the Under 18 accounts in 2024 include letting parents view their kids' account balances and transaction histories, as well as offering transaction alerts to a parent's bank account.
"As a parent, you might want to know where the person is transacting, what those transactions were, and you can decide to have notifications for those or not," Ahearn said. "The parental control features in general are well-used, and we're continuing to expand those. For example, different limits for different merchants are the kinds of things we're thinking about in the future."
Ahearn also said that many Latin American parents with Nubank accounts are looking to guide their kids through a more controlled financial environment and bring them toward financial autonomy more gradually, whereas families in the United States often operate kid's financial accounts with a more hands-off approach.
Although parents or legal guardians can view their kid's account balances and set up deposit transfers, such as for allowances, they don't have open access to withdraw money from their kid's accounts. Kids can set up transfers into their parent's account if they wish to do so, but this is not necessarily common practice among Nubank's customer base, according to Ahearn.
Under 18 also complements Nubank's existing Family Space feature, where heads of households can share balances and split expenses. Nubank rolled out its shared balance feature in January 2024 for its Ultravioleta membership tier customers to make deposits, payments and transfers via a shared family account for rent, bills and other family needs.
"Financial services overall, is something that you do in a shared manner," Ahearn said. "It's not something that you do just individually, particularly once you start a family. In order to create that safe environment that we want to give our under-18 customers, we want to allow the parents to be participants in that conversation as well."
The feature includes an automatic proportional division based on amounts deposited by each Family Space member. For example, if someone deposits 40% of the total balance, they will automatically contribute 40% toward expenses paid with that balance.
Currently, the Family Space feature is exclusive to the neobank's Ultravioleta tier, which costs
"At some point we might also expand that family space feature for other tiers within our population," Ahearn said. "Currently, we made the decision to make it exclusive because we're still refining and iterating on the product. In general, just from a product perspective, you want to keep your population smaller and be able to make sure that the iterations happen in an environment in which you're kind of controlling that population until you get to perfect product market fit. Families are important to all income segments, and we're starting out the product with one segment, then understanding the differences and iterations that we can build to serve every segment better."
The feature helps families keep track of shared contributions and manage multigenerational household finances more effectively.
"When looking at finances from a household point of view, everything that you do is multifaceted and it impacts so many people," Theodora Lau, founder of Unconventional Ventures, told American Banker. "We need to think of financial services as a shared thing."
Lau noted that although
"That's even more so in the last few years, ever since COVID," she said. "More people are either moving back home or staying at home after they graduate high school or college. It makes sense for them to find ways to share expenses, and I think it is something that we need as well. As we continue to see growth in multigenerational households living together, we do need to share some sort of financial responsibility in one way or another."
In April 2024, Nubank's Under 18 feature, which accounts for more than 18% of Nubank's new customers monthly,
"Within the past year we've moved from looking at Under 18 as more of a growth venue to really focusing on creating an amazing product by which we can help both parents and kids to increase their financial literacy, build their relationship and have that open conversation," Ahearn said.
