So as my kids get older, they are seeking more and more independence and that often leads to requests for money.   My son has stockpiled about $1500 in cash and while it sits in his own bank account with a debit card, I don’t feel too comfortable with the potential loss of that debit card or misuse where he ends up losing the money.

It seems to me that banks have designed their banking system with a huge gap.   The banking world and the associated banking fraud has moved beyond the same basic checking/saving account where a single tier account system is largely useless in today’s world.  Who the hell puts all their money in one bank account and has one debit card tied to it anymore?

What is truly needed is a primary account that is secure and holds large amounts of money and subaccounts that are isolated and can hold smaller amounts of money.    The large account can hold say $10,000+ and then feed down a  few hundred bucks at a time to subaccounts.     A debit or credit account can then be tied to the subaccount and only that amount at money is at risk.

Honestly, I don’t know why banks haven’t already done this for consumers, particularly the affluent customer.   For now, I have my own ecosystem of banking accounts to do what I just described which is why I have multiple bank accounts and various financial institutions – largely to keep large amounts of money isolated that feed other accounts where I can access cash – about $1,000 to $2,000 at a time.

Obviously, it would be too difficult and time consuming to create this ecosystem for each of my kids so the next best alternative I have found so far is the Bluebird American Express Card.  You can find these at Walmart money centers.   I just got one and will follow up with a post later on the use but so far so good.   You can setup a primary account and four sub accounts (must be age 13 or older) and then funnel money between accounts and pull money from a primary bank account.  The goal here is to keep the primary amount of money my son has ($1500) in his main account then siphon money from there to his bluebird account as he needs it $50 to $100 at a time.

The only HUGE fail of the BlueBird American Express card is that funds are not FDIC insured.  Repeat…FUNDS are NOT FDIC insured.   I don’t know the solvency of the agency backing the cards but it’s a HUGE gap in protecting account holders funds.   Ultimately, it’s not a really big deal  for me because I will only transfer small amounts of money to the Bluebird cards but if Bluebird ever expects for people to use these as their primary banking platform (which the literature suggests) then they need to fix the FDIC  insurance gap!  YOUR MONEY IS NOT INSURED when it float inside the Bluebird card!