Nationwide Building Society has released a new fee-free current account for kids aged 11-17 that has took the market by storm with its plethora of attractive features.
The FlexOne current account is targeted at helping the young generation of today acquire the vital financial skills they will need during their adult lives, through the provision of a product that will get them to grips with using technology-based banking from an early stage.
Nationwide have confirmed that the account automatically pays 1% interest on balances up to £1,000 and a connected savings account which pays a hugely alluring rate of 3.5%. Consumers can also decide whether they want their bank card to be a contactless visa debit or a cash card, and can save a maximum of £100 each month ñ an ideal sum for young workers who work part-time.
The debate over whether financial education should be provided at elementary or secondary level has raged for years now, with 2014 marking the first occasion that it has been taught at schools in the UK. Nationwide deserve full credit for attempting to address the problem independently and enhance the financial prowess of people by re-shaping the grassroots of how they handle money.
The building society have also announced that all young account holders who are experiencing problems with their account or have a financial query can access them directly 24 hours a day, via their @YourFlexOne Twitter account or mobile app ñ a measure they believe will allow children to be more comfortable with holding an account.
ëHelping children to make the most of their moneyí
Nationwide have clearly identified that the next generation will be using their financial products digitally, and their decision to release the new FlexOne account is an inspired way to help people familiarise themselves with operating with their money online.
Opting to make the card fee-free ñ including overseas usage ñ gives concerned parents further incentive to obtain the card on behalf of their children, who can top the cash card up prior to going on a holiday in order to avoid the high foreign bank charges they would otherwise have been subjected to, and acquire interest payments for their kids benefit.
The account also allows users to get 25% off tickets at all Vue Cinemaís during their first year, and auto enrols holders into monthly competitions where they could win holidays and other financial rewards.
Paul Wootton, Nationwideís head of product management for current accounts, said: ëThis is the first time Nationwide has offered a current account specifically for young people. We recognise their banking needs are different and thatís why weíve designed FlexOne with this in mind.
ëWe believe weíve created not just a strong product, but something that will be relevant to the lifestyles of young people through a range of benefits designed to help them make the most of their money in a safe and secure way.í
The FlexOne account can be retained by an account holder until they turn 23, after which they are automatically transferred to a FlexAccount. After a user turns 18, they are eligible to apply for overdraft facilities, and Nationwide have made it impossible for individuals to fall into arrears in their account until that time that they have become an adult. Such a policy deserves credit because it protects young children from falling into debt at a young age and teaches them the importance of keeping in the black with their account balances.
Justin Modray of advice website Candid Money, echoed these sentiments, asserting :'On the one hand debit cards can help give young children a sense of financial responsibility.
'But on the flip side they may encourage financial irresponsibility as paying on plastic does not always feel as real as when you hold cash in your hands.
'On top of this there is a risk kids could end up shopping in less desirable shops online or blow everything they have on iPad apps - parents will need to police their childrenís spending very carefully which is a rather tall order.'
Nationwide are the latest lender to begin targeting their products towards children, with Santander RBS and Lloyds all releasing similar current accounts over the past few weeks.
The 123 Mini account currently offers a headline saving rate of 3% on balances up to £2,000, whilst the RBS and Lloyd Under 19 accounts pay 2.5% on balances up to £2,500.