The online bank ING Direct is introducing a new debit card and e-banking account designed specifically for teenagers. But considering how the product works—daily spending is limited, there’s no possibility of overdrafts, and parents can monitor the teen’s every transaction via a linked account—it’ll probably appeal more to moms and dads.
ING Direct is simply calling the new product MONEY, and it’ll be available to families within a few months, after the final stages of testing are completed. To sign up, a parent must first have an ING Direct account. The parent and child then apply online together, and the teen’s account is initially funded via a transfer of as little as $1 from the parent’s account. From then on, deposits can be made via direct deposit (likely from the teen’s employer) or through more transfers from the parent’s account.
Like most online bank accounts, MONEY is free of many of the requirements and fees common at brick-and-mortar financial institutions. There are never any minimum balance requirements or monthly fees. Unlike the typical bank account today, which not only comes with fees but pays off no interest, the new ING account actually earns interest—most likely 0.25% to 1.00% APY, which may be next to nothing, but is still better than nothing.
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What makes this account especially designed for teens, though, are the product’s limits and parental oversight. No more than $500 per day can be spent on the debit card tied to the teen’s account. (With a phone call, a parent can ask that the limit be increased temporarily.) An overdraft—spending more money than is in the account, normally accompanied by a fee of $35—is not an option. If the teen tries to take more money out from an ATM than the account holds, or if he tries to buy something with his card that costs more than the account’s balance, the transaction will simply be denied.
Parents can also closely monitor every move relating to the account. Both parents and teens can get text and/or e-mail alerts every time the account’s card is swiped. When parents log in to their ING Direct account (via the website or mobile app), they can review the play-by-play history of transactions in their teen’s linked MONEY account. And parents need not worry about their kids spying in reverse: Teenagers don’t have access to their parent’s accounts, even though the accounts are linked. What’s more, parents have the power to transfer money between accounts, but teenagers do not. So if a parent is so inclined, she can empty the child’s account with a few clicks.
The account is designed to give teens some personal experience with bank accounts and debit cards without running the usual risks of spending frenzies or major fees—and without the risk of parents having to bail them out after nonsensical splurges. All of which should provide lessons in responsibility and sound fiscal management for teens. But what teenager wants that?
While the product’s nitty gritty will appeal to parents, ING is going another direction to appeal to the consumers that’ll actually use the product, teenagers. And what is ING doing? As Adweek notes, the e-bank is launching an ad campaign and series of competitions conducted via Facebook in which teenagers can win cash ($1,000 deposited to the new account), as well as MacBooks and iPod Touches. That stuff’s more fun than the concept avoiding overdrafts any day.
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ING’s MONEY isn’t the first debit card marketed to teenagers. The celeb-endorsed debacle that was the Kardashian Kard was a prepaid card viewed to have considerable appeal to younger consumers—then again, who else could they convince to pay hundreds of dollars in annual fees mainly for the right to access one’s own money using a card (kard?) featuring Kim Kardashian.
CBS Money Watch recently reviewed another debit card aimed at the teen market. It’s called BillMyParents. If nothing else, some teens should like the name.
As for parents? They probably won’t like the name or the product’s terms. Like the ING account for teens, parents can be alerted via text or e-mail every time their child uses the BillMyParents SmartSpend Card. Parents can also disable the card whenever they like. Whereas ING’s teen account is free, however, using a BillMyParents card costs $3.95 a month.
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Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.