Step is a new online banking solution that is targeted towards teens. Like most mobile banking apps they offer an account with a linked debit card and no monthly fees or minimums. They also advertise an interest rate up to 2.5% APY. It’s available to teens under the age of 18 with parental permission, but not available to anybody 13 or under.
The F.A.Q claims they are able to offer this rate because they don’t have the traditional overheads other banks have. It doesn’t mention any requirements to earn this 2.5% APY rate. The founder of Step is also the previous founder of Gyft that was sold to First Data a few years ago.
The debit card offered will be a Visa debit card and will allow parents to set up spending limits and have the ability to turn the card on and off. At the moment you can’t sign up for Step directly, but you can join the wait list. If you refer a friend to the wait list you can also get a $1 bonus.
My personal opinion is that I’ll believe it when I see it. It’s easy to make promises when you haven’t launched yet, but it’s harder to actually keep those promises. My guess is that by the time Step launches either 2.5% APY won’t be a competitive high yield checking account or that they will add requirements to get that rate. I don’t have kids so I’m obviously not the target market, but I’d be interested to hear from those who do have kids.
Hat tip to reader Alec E
