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Children of all ages can research, buy and sell stocks, including stocks as well as exchange-traded funds. The app with the investment option costs around $8 per month, but there are no extra fees for transactions. To trade, the child must seek parental approval through the Greenlight app.
Tim Sheehan, CEO of Greenlight, said the investment option was a logical step after children learned the basics of saving and spending within their means. The option includes access to research from Morningstar and offers short videos explaining investment concepts such as price-to-earnings ratio.
While the applications look promising, it makes some financial education advocates wary. President Lennette Coleman FoolProof Foundationpromoting “healthy skepticism” about financial products. He added that if apps make investing a game, kids may be more engaged—but also more likely to take risks.
“There are so many nuances in the stock market,” he said, “and they don’t understand those nuances.”
Tim Lambrecht, director of education In the Budget ContestHe said the apps, a program that uses simulations to teach students about paying bills, budgeting, and investing, can get young people excited about investing, but most emphasized buying individual stocks and lacking knowledge about long-term investing in tax-advantaged index funds. accounts.
“This sends the wrong message,” he said. “You have to invest in retirement; You can’t save enough.”
Here are some questions and answers about financial literacy and money practices:
Do financial apps charge and do they pay interest on savings?
Fees vary. Some apps, such as Step and Copper, do not currently charge monthly fees, but do make money from “swipe” fees, which are fees paid by merchants when customers use their cards. Greenlight charges a flat monthly fee that starts at around $5 for the base app and goes up to $10 for a version that offers investment option and other benefits.
Most apps offer federally insured savings accounts through partner banks, but pay little or no interest on balances. Greenlight said it now pays 2 percent of savings for balances up to $5,000 in some accounts. It also allows parents to set their own custom rates, allowing them to match everything their child has recorded.
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