New kid on the block: How pocket money app Spriggy compares to traditional kid’s bank accounts

Finding a way to get kids interested in the world of personal finance can be tough - after all, it’s complicated enough to tackle money issues as an adult - and forking over that $10 note in pocket money each week doesn’t really count as education.

Traditionally, kid’s bank and savings accounts have been the starting point for getting to grips with finances, but they can often fall short when it comes to balancing parental control with giving children the freedom to spend and learn independently.

That is, until fintech start-up Spriggy arrived.  

Given the rise of fintech in everything from saving and budgeting apps to mobile payments systems, it’s not a surprise to see the emergence of a mobile app catered towards kid’s banking. But before jumping on the app and transferring funds out of the kids’ dollarmite account, we look at how Spriggy stacks up to traditional bank accounts.  

So what is Spriggy?

Spriggy is a prepaid debit card and mobile app - that’s the simplest way to put it. Since launching in November 2016, Spriggy has amassed a user base of 35,000 people and given children and parents the opportunity for some hands-on experience with financial decisions like saving, spending and even budgeting.

The Spriggy debit card allows children to use their own money for their own purchases, while the linked Spriggy app gives them the ability to choose how they wish to portion out their pocket money - whether that’s transferring it to the card for spending, or into customisable ‘savings accounts’ on the app to help them reach their savings goals.

And where do parents come in? Well they have full overview and control of the app which allows them to see what their kids are spending money on, as well as being able to choose just how much pocket money their kids can spend by controlling how much money is put onto the card in the first place.

How does the Spriggy card work?

Once parents have signed up online for an account and activated the Spriggy card, they will be able to load funds into the Spriggy digital wallet by linking it to their own debit card or bank account and transferring money across. Children will then be able to use the card at any stores (in person or online) that accept Visa.

How does the app work?

The Spriggy app is compatible with both Apple and Android. It’s a digital wallet with different accounts accessible to parents and children (well parents have access to everything), and here’s a basic run through of how to use the different accounts:

First up you’ll need to transfer money onto Spriggy through a linked debit card or bank account. Say you want to transfer across $50, this will end up in the ‘Parent Wallet’ account on the app which your child can't see.

Ok, so there’s now $50 sitting in the ‘Parent Wallet’. What next? To make those funds available to your child you’ll need to transfer that $50 (or a smaller amount) into the ‘Pocket Money’ account. So effectively you're giving them their pocket money!

Now that the $50 is sitting in the ‘Pocket Money’ account, your child will be faced with two choices: either they can transfer it to the ‘Spriggy Card’ account where’ll they be able to spend it (using the card), or to the ‘Savings Goals’ account where (unsurprisingly) they’ll be able to save it. Your child will be able to set up multiple goals in the ‘Savings Goals’ account so they can save for different things at once!

Does Spriggy cost money?

Yes. Spriggy charges $30 a year for each child and the card itself expires after a year. While the Spriggy card can be used by your kids overseas on your next vacation, any foreign currency transactions will be hit with a 3.5% surcharge.

But what about ATM’s I can hear you asking. Spriggy doesn’t currently support ATM withdrawals, but it may do so in the near future.

Are their minimum or maximum deposit limits?

Yes. The minimum you can deposit onto the card is $10, while the maximum transaction limit is $250. There’s also a maximum balance of $1,000 across a single child’s account. For example, you could have a ‘Parent Wallet’ account balance of $700, $50 on the ‘Spriggy Card’ account and $250 in ‘Savings Goals’ account, but anything higher and you’d be over the limit.

Will the savings accounts earn interest?

No, which is a major bummer. According to Spriggy, due to regulatory constraints they can’t offer interest payments on ‘savings accounts’. However, the website states that they are looking into others options to encourage saving such as a parent-paid interest option.

What are the other useful features?

  • Instant transfers: If there’s ever an emergency you’ll be safe in knowing that you’ll be able to instantly transfer funds from your linked debit card to the ‘Parent Wallet’ account and then into the ‘Pocket Money’ account for your child to access. However a transfer from a non-linked bank account will take 2-3 business days.
  • Alerts: Receive text alerts if a transaction on the Spriggy card has been declined because of insufficient funds or because of security issues.
  • Card lock: If the card is lost or stolen then either you or your kids can use the lock function feature to block future purchases.
  • Multiple users: Keen for more than one of your kids to get on the app? Not a problem, because Spiggy allows one family account for multiple kids.
  • Scheduled transfers: Want to make it really feel like your kids are receiving weekly pocket money? Well the app allows you to set up scheduled transfers from the ‘Parent Wallet’ account to the ‘Pocket Money’ account.

So how does Spriggy  compare to traditional kid’s accounts?

Spriggy may have a number of appealing features which make it a great way to get kids involved in making financial decisions from a young age, but how does it stack up against some of the traditional banking providers on the market?

Source: Mozo, rates correct as of August 31st 2017

The Verdict

If you’re after a more hands on approach for you and your children to take on the world of personal finance, then Spriggy could be the option for you. You’ll just have to weigh up the yearly fee and lack of savings interest compared to the more rewarding options provided by traditional accounts, but the practical benefits the app provides are nearly unparalleled compared to traditional accounts.

However, the $1,000 maximum balance and lack of savings interest could provide enough incentive to shop around for a traditional kid’s savings account (either as a supplement or alternative) - especially with appealing interest rates currently as high as 5.00% for some accounts.