Wealthsimple Kids and Teens Account: Prepaid Visa Card and Up to 2.25% Interest

Wealthsimple kids and teens account at a glance

It is a chequing account that a parent opens and manages on behalf of their child. Legally, it is a bare trust: you are the legal account holder and trustee, and your child is the beneficial owner of the funds. Statements and T5 slips are issued as "[your name] in trust for [child's name]".

Your child gets a Kids and Teens prepaid Visa card and a simplified version of the app. You keep control of spending limits, blocked categories and notifications.

Who can open a Wealthsimple kids account?

To open a kids and teens account, you must meet three conditions:

• be an existing Wealthsimple client with an open chequing account;
• have completed identity verification;
• open the account for a child under the age of majority in their province (18 or 19, depending on the province).

You can link up to 10 kids and teens accounts to your profile. Your child does not need to provide ID. Accounts are opened only in the mobile app, and it takes a few minutes.

The prepaid Visa card for kids

As soon as the account is open, Wealthsimple issues a virtual card that works with Apple Pay or Google Pay. The physical card is optional and arrives by mail. It can be used to withdraw cash at ATMs.

The card also carries two perks from the adult Wealthsimple chequing account: no foreign exchange fees and ATM fee reimbursements worldwide. However, it earns no cash back.

Up to 2.25% interest, with conditions

The 2.25% figure Wealthsimple promotes is a maximum. Your child's account earns the same rate as the parent's chequing account, and that rate depends on your client status:

• 1.25% for all clients with a chequing account;
• 1.75% for Premium clients, or Core clients with an eligible direct deposit;
• 2.25% for Generation clients, or Premium clients with an eligible direct deposit.

In other words, most families will earn 1.25% or 1.75%. To understand these tiers, read our article on Wealthsimple Premium and Generation accounts.

Parent-paid interest

This is the most original feature of the product. With parent-paid interest, you top up the rate your child earns yourself. A slider lets you pick a combined rate from 10% to 100%, and the app shows a projection of the balance over time.

Each month, Wealthsimple calculates the amount and moves it from your account to your child's on the 1st. It is not real interest: it is a payment from you, presented as interest to make saving feel concrete. If your account does not have enough money on the 1st, that month's payment is skipped. After two failed payments in a row, the feature turns off.

Allowances and transfers

You can send a one-time transfer or schedule a weekly, bi-weekly or monthly allowance. The money arrives instantly. Your child can also send you a money request, which you approve or decline.

There is one important constraint: for now, only your own Wealthsimple chequing account can fund the account. Each transaction is capped at $999, whether it is a deposit, an allowance payment or a withdrawal. Interac e-Transfers, direct deposit and higher limits are listed as "coming soon", with no date.

Parental controls

From your own app, you can:

• set spending limits per transaction, per day, per week or per month;
• block in-person purchases, online purchases or ATM withdrawals;
• turn off international purchases;
• block certain categories, starting with digital gaming and in-app purchases;
• get a real-time notification for every purchase;
• lock the card. If your child locks it, only you can unlock it.

You can also invite a co-manager, who does not have to be the other parent. A co-manager can set limits and lock the card. However, they cannot order the card, set up parent-paid interest or close the account.

What to know before opening an account

First, the money belongs to your child. You can take it out to pay for something for your child, but using it for yourself breaches your duties as trustee.

Second, taxes need some attention. If the money comes from you, attribution rules generally mean you report the interest. Wealthsimple also notes that a T3 return may be required and recommends speaking with a tax professional.

In addition, the account is not eligible for Wealthsimple promotions, referral programs or bonuses. Finally, it is not an education savings tool. An RESP is still the right account for that, and Wealthsimple now offers the QESI in its RESP in Quebec.

What about Quebec?

Wealthsimple says the account is not available in Quebec "due to legal and regulatory differences in the province". The company says it is working on bringing it to Quebec, with no date announced. If you open an account elsewhere in Canada and then move to Quebec, the account stays open, but you cannot open a new one.

In the meantime, Quebec parents have other options. Several credit cards let you add a teenager as an additional cardholder; our article on the minimum age for an additional credit card covers the details. For the basics, see our tips on introducing your children to personal finance.

The Milesopedia angle for families

Teens who travel with no FX fees

For families who travel on points, the kids card has one concrete advantage: no foreign exchange fees and ATM fee reimbursements worldwide. Your teen can pay for meals or withdraw cash on a family trip, a school trip or a student exchange without the roughly 2.5% FX fee most Canadian cards charge.

You also keep control from a distance: a daily limit, international purchases switched on only for the trip, and a notification for every purchase. To plan your next trip, see our points strategies for family travel during school breaks and this student exchange in Asia paid for with points.

For parents: the Wealthsimple Visa Infinite+ card

The kids account requires a Wealthsimple chequing account in the parent's name. If you already have one, the Wealthsimple Visa Infinite+ Card rounds out the family setup: 2% cash back on every purchase, with no categories, and no foreign exchange fees on your own spending abroad.

• Fees: $20 a month, or $240 a year, waived for Premium and Generation clients or with an eligible payroll direct deposit. Those are the same statuses that give your child's account the best rate.
• Welcome offer: up to $500 cash back, which is 5% on your first $10,000 in purchases during the 30 days after approval.
• Eligibility: a personal income of $80,000 or a household income of $150,000.

At 18: the first credit card

The account stays with your child after they reach the age of majority. It is also the right time to start building a credit history, which will matter for a first apartment or the travel cards they will want one day.

Our guide to the best first credit card for young adults 18 and over and our tips on building a good credit score as a student will help you plan the next step. To compare other bank accounts for young people, see our list of the best chequing accounts.

Our take

For a family already banking with Wealthsimple outside Quebec, this account is a good learning tool. It costs nothing, the card has no foreign exchange fees and the parental controls are thorough. Parent-paid interest is a smart teaching idea, as long as you remember that you are the one paying.

However, two limits weigh on it for now. The account can only be funded from your Wealthsimple chequing account, so a grandparent cannot send an Interac e-Transfer for a birthday. And the 2.25% rate only applies to Generation clients or Premium clients with direct deposit.

If you do not have an account yet, start with our review of the Wealthsimple chequing account, which you need before opening a kids account. And for parents who would rather earn points on family spending, our guide to the best credit cards compares the options.

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Wealthsimple kids and teens account: frequently asked questions