2 hours ago
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Carl Sullivan
Sat, April 25, 2026 astatine 7:53 AM CDT 4 min read
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Cash App teen accounts prioritize spending implicit investing and miss the accidental to thatch teens wealth-building habits, whereas accounts similar Fidelity Youth Account stress investing from an aboriginal property to physique semipermanent wealthiness done compound growth.
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A teen who invests conscionable $9,000 of summertime occupation net successful a Roth IRA betwixt ages 15-17 could accumulate implicit $400,000 successful tax-free status income by property 65 owed to 50 years of compound maturation astatine 8% yearly returns.
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A ma named Sandy from Michigan called into The Clark Howard Podcast this week with a parenting question. "My 12-year-old asked maine astir getting a Cash App teen relationship to larn much astir finances," she said. "I deliberation her favourite portion is that she gets to plan her ain debit card. Priorities, right?"
Host Clark Howard told Sandy wherefore the Cash App relationship isn't the champion choice. "The programme is fundamentally a spending program," helium explained. "They bash person a small spot determination astir however you tin person a savings relationship arsenic a teen, but it's truly astir having a mode to spend. My occupation with immoderate slope programme geared towards teens is it's each astir making them spenders and borrowers. Not investors."
A teen relationship should thatch them what wealth is for. Pick a instrumentality that celebrates tap-to-pay, and the acquisition is that wealth is for spending. Pick a instrumentality that lets a teen bargain their archetypal stock of an scale fund, and the acquisition is that wealth is for owning things that grow.
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Howard suggested Sandy alternatively look into a merchandise similar the Fidelity Youth Account. He said the relationship is "awesome due to the fact that its accent is allowing entree to funds similar your 12-year-old wants, but it's each astir teaching investing. ... [It creates] a mindset aboriginal astir the intent of gathering wealthiness for the future, immoderate crushed they're gathering that wealth."
He emphasized the semipermanent vantage of starting investing early. "As soon arsenic a teen has a job, gathering the wont astatine their archetypal jobs astatine 14, 15, oregon 16, that they're putting wealth into a Roth IRA, getting 50 years astir of maturation connected that money. Creating clip creates truthful overmuch wealth, and gathering habits creates truthful overmuch wealth."
Roth IRA contributions are made with after-tax dollars, each dollar of maturation compounds tax-free, and qualified withdrawals successful status are tax-free. A teen successful the 10% oregon 12% bracket is efficaciously buying tax-free status income astatine a discount nary big volition ever spot again.
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