Greenlight does not offer a traditional savings account
Greenlight is a debit card and money management app built for teenagers and families, not a bank. It does not hold savings accounts in the way a bank like Chase or Ally does. Instead, Greenlight lets parents load money onto a debit card for their child, set spending limits, and track where that money goes in real time.
The money you load onto a Greenlight card sits in a custodial account at Greenlight's partner bank, Lincoln Savings Bank. That account is FDIC insured up to $250,000, which means your money is protected if the bank fails. But Greenlight itself is not a bank — it is a financial technology company that manages the card and the app.
If you are looking for a place to store money and earn interest on it, Greenlight is not the right tool. If you want to give your teenager a debit card with parental controls and the ability to teach them about spending, Greenlight does that job.
Key Takeaways
- Greenlight holds money in a custodial account at Lincoln Savings Bank, which is FDIC insured, but Greenlight itself is not a bank and does not offer savings accounts.
- Money loaded onto a Greenlight card does not earn interest, so it will not grow over time.
- Greenlight is designed to teach teenagers about spending and money management through a debit card with parental controls, not to store savings.
- If you want your teenager to earn interest on money they save, you will need to open a separate savings account at a bank or credit union.
How Greenlight stores the money you load
When you add money to your Greenlight account, that money goes into a custodial account held at Lincoln Savings Bank. A custodial account is one that a parent or guardian controls on behalf of a minor. The money is not sitting in Greenlight's own vault — it is held at an actual bank.
Lincoln Savings Bank is an FDIC-insured institution, which means each account holder's money is protected up to $250,000 if the bank fails. This protection applies to each person separately, so if you have a Greenlight account for your child, that $250,000 protection is separate from any other accounts you hold at that bank.
The trade-off is that your money does not earn interest. Banks that offer interest on savings accounts use your money to make loans and investments, and they share some of that profit with you as interest. Greenlight does not do that — the money just sits there, available for your child to spend when you allow it.
What Greenlight is actually designed to do
Greenlight is a tool for teaching teenagers about money, not for building savings. Parents can load money onto the card, set daily or weekly spending limits, and see every purchase their child makes in the app. Some versions of Greenlight also let parents assign chores and pay their child an allowance directly to the card.
The app shows teenagers their balance, their recent transactions, and how much they have left to spend. This real-time feedback is meant to help them understand the connection between spending and money running out — a lesson that a piggy bank or a regular savings account does not teach as clearly.
Greenlight also offers features like the ability to lock the card if it is lost, set up recurring transfers, and create spending categories. These are management tools, not savings tools. They help you control how your teenager spends money, not how they save it.
Where to put money if you want your teenager to earn interest
If your goal is to help your teenager save money and watch it grow, you need a separate savings account at a bank or credit union. Many banks offer high-yield savings accounts for minors that pay 4% to 5% annual interest, depending on the current rate environment. Credit unions often offer similar products.
A typical setup is to use Greenlight for spending money and a separate savings account for money your teenager is meant to keep. You can transfer money between the two, so your teenager sees the difference between money to spend now and money to save for later.
Some families use both tools together: Greenlight for the debit card and spending lessons, and a savings account at a traditional bank for longer-term goals. This approach teaches two different money skills at the same time.
Greenlight's fees and what they cover
Greenlight charges a monthly subscription fee to use the service. The fee varies depending on which plan you choose — Greenlight offers a basic plan and a premium plan with more features. There is no monthly fee for simply holding money on the card; the fee is for access to the app and the parental controls.
You do not pay a fee to load money onto the card or to make purchases with it. Greenlight does not charge overdraft fees because the card cannot go negative — your teenager can only spend money that is actually loaded onto the card.
If you want to move money out of Greenlight and into a bank account, you can transfer it to a linked bank account. Greenlight does not charge for this, though your bank might depending on how the transfer is set up.
Alternatives if you want both a debit card and savings
Some banks offer teen checking and savings accounts together, often with a debit card attached to the checking account. This approach gives you one place to manage both spending and saving, though you lose the parental controls that Greenlight provides.
Other fintech apps like Step, Copper, and GoHenry offer similar debit card products for teenagers with parental oversight. None of them offer interest-bearing savings accounts either, but they may have different fee structures or features that work better for your family.
The most straightforward approach is to open a savings account at your own bank for your teenager and use Greenlight or another debit card app for spending. This keeps the two purposes separate and clear.
Frequently Asked Questions
Does money on a Greenlight card earn interest?
No. Money loaded onto a Greenlight card does not earn any interest. It sits in a custodial account at Lincoln Savings Bank and remains available for your teenager to spend, but it does not grow over time. If you want your teenager's savings to earn interest, you need a separate savings account at a bank or credit union.
Is my money safe if I use Greenlight?
Yes. Money held in a Greenlight account is FDIC insured up to $250,000 through Lincoln Savings Bank. This means if the bank fails, your money is protected. Greenlight itself is not a bank, but the money is held at an actual bank that is federally insured.
Can I transfer money from Greenlight to a savings account?
Yes. You can link a bank account to Greenlight and transfer money between them. The process typically takes one to three business days, depending on your bank. There is no fee from Greenlight for this transfer, though your bank may have its own policies.
What happens to the money if my teenager stops using Greenlight?
The money stays in the custodial account. You can transfer it to another bank account, withdraw it, or keep it in the Greenlight account even if the card is not being used. You control the account as the parent or guardian, so you decide what happens to the funds.
Can I use Greenlight as my only account for my teenager?
You can, but it is not ideal if your goal includes saving money. Greenlight works well for teaching spending habits and giving your teenager a debit card, but without interest earnings, it is not a good place to store money long-term. Most families use Greenlight for spending and a separate savings account for goals.