The New Year is a good time to give your child some level of financial literacy. One way to do this is through a smart prepaid card. Launched by fintechs (banks partner with them), these cards can impart some practical spending lessons onto kids. Parents can load money onto these cards, up to a certain limit. While using these smart cards, children can learn how to spend, save money and not overspend.
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These smart cards are for children under 18 years and work on the principle of pocket money. Some of the key features of these smart cards for kids are parents receive an alert every time child swipes the card, parents can put spending limits and cash withdrawal limits from ATMs, child can earn interests on savings, parents can control activation and deactivation of the card from the app and more. Parents with a minimum KYC and full KYC can load up to Rs 10,000 and Rs 2 lakh respectively, per month on these smart prepaid cards for kids.
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FamCard is a co-branded prepaid card for kids issued by IDFC FIRST Bank. You can apply and activate the card on the FamPay app. There are two variants of this card, FamCard ME and FamCard. The one-time fee of FamCard ME is Rs 299 and FamCard is Rs 99. There are no additional fees or charges and requires no minimum balance to be maintained in your account.
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Fyp a fintech startup, is offering a prepaid card for children in association with Yes Bank and Visa. There is no fee to open the account and you can maintain a zero balance. Your child can earn rewards and cashback with every successful transaction using the card. The child also learns financial skills through content, videos, quizzes, etc. on the Fyp app.
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Junio has partnered with RBL Bank to issue the smart card. Through this smart card children can make physical and online purchases. After completing the KYC process, a virtual card is issued instantly, which is free of cost. The cost of a physical card is Rs 99. While loading money through UPI on the card, you get 2 percent cashback. When your child swipes the card in a nearby shop, she earns 3 percent cashback. Parents can create in-app tasks for children and give a reward as extra pocket money.
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Pencilton offers virtual and physical RuPay debit card, PencilCard, to teenagers and students to help them manage their expenses while learning money management skills. The fintech has associated with RBL bank to issue the cards. The virtual PencilCard is free of cost and the physical card is Rs 199. The app lets parents give pocket money to kids while keeping track of their expenses and teaching real-life money skills.
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Slonkit is offering a re-loadable prepaid card for children in association with DCB Bank and Visa. The card allows parents to give a monthly allowance to kids. The slonkit app helps parents transfer money instantly, create budgets, set transaction limits, analyse the child’s spend across categories, and set alerts.
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While choosing the smart card, know about the features, charges and rewards. Evaluate the recent reviews of parents and kids using the app while opening the account. Initially, do not load a higher amount on this smart card as the child may overspend randomly. Parents must monitor kids' spending behaviour regularly while using this smart card and explain the importance of monthly savings with other financial concepts.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
