EXCLUSIVE – Fintech startup Greenlight Financial Technology has just added a new feature that helps kids understand tricky concepts like interest, APR and savings accounts.
Today the Atlanta-based Greenlight unveiled a feature which lets kids create a savings account through their Greenlight app, an account that is controlled by a guardian.
The feature allows the guardian to set whatever interest rate they want, paying that rate into the child’s account. In the case of Greenlight CEO Tim Sheehan, he has set the interest for his kids to 12%, he told Bank Innovation. The most common interest rate for a typical savings account was 0.01% for 2017.
“The idea is basically to exaggerate the point to make the point,” Sheehan told Bank Innovation. Once the user picks a rate by selecting the option in the Greenlight app, the company automates the rest of the process.
Since its launch last January, the company has grown tremendously. “It’s been crazy growth,” Sheehan told Bank Innovation. “We are doubling our users every two months and are now up to 75K customers.”
Launched in January 2017 by Sheehan, who formerly co-led Yahoo Finance, Greenlight focuses on enabling parents to transfer money to their children on an app using gamification incentives (more on this here). The mobile app, available on both Android and Apple, lets parents instantly send money and allocate funds to specific purchases. For $5 per family, each family is given up to five Mastercard-powered debit cards with a limit of a $1,000 per card, per child.
“We’ve noticed that a lot of working kids want to use Greenlight for direct deposits, so we are in the process of increasing the limit right now,” he said. There is no set timeline that Sheehan could disclose.
This new savings feature is part of Greenlight’s strategy of moving beyond debit cards and tackling other areas related to savings, credit and investing.
In May 2017, the startup received $7.5 million in seed funding led by Canadian Relay Ventures. Other investors included Social Capital, NEA, and TTV.
Learn more about digital lenders and fintech startups at Bank Innovation 2018 in San Francisco on March 5-6. Request your invitation here.