The 1.00% APY has one of the highest rates in the country. If you move both your checking account and savings account into an Aspiration Account, you would be able to earn a high interest rate on your money while avoiding the risk of overdraft and enjoying the convenience of only having one account.
Aspiration is a fairly new financial services company that aims to be â€śthe investment firm for the middle class.â€ť In this video (that could pass for a parody if you didnâ€™t realize they were serious), the company proclaims that it is possible to be a â€ścapitalist with a conscience.â€ť Lofty goals are behind the company and the products they have designed. The CEO (Andrei Cherny) was a former Clinton White House aide, and with Aspiration he is trying to take action and create a new type of financial services firm that lives up to his ideals.
All products offered by Aspiration (which includes two investment funds and a cash management account) have the same pricing model. You decide how much to pay. Yes, the fee is set entirely by you, the customer. You can set it to $0 or you can set it to any amount below $10. You can change the fee whenever you want. They provide a service and you decide what it is worth.
Aspiration is making a big bet.
With traditional banking, people are nickel and dimed every month. Make an out of network ATM withdrawal, and you could end up spending $10 in fees. Put your money into a savings account, and earn only 0.01%. By using Aspiration, you could be much better off financially than banking with your traditional bank. And you can do your own calculation and decide how much of that savings you share with Aspiration. They are hoping that you will share enough for the business to continue.
Opening an account used to be a bit challenging as you needed to be invited. However, Aspiration has made it as simple as ever to open an account. Simply click on the â€śGet Startedâ€ť button on their website and enter your email address.
At that point, you should be directed to a page that allows you to open your account online and apply for the account.
Create your password, check the box to let Aspiration know youâ€™ve read the Terms and Conditions, and click â€śLetâ€™s Go!â€ť. Since this is an online account, there will be extensive KYC (know-your-customer) and compliance questions. I was required to provide:
Once you finish the account opening process, it may take a few days for the account to be open and for you to receive your debit card in the mail. Aspiration has partnered with Coastal Community Bank in a way that is similar to how Simple operated. (Simple, for those who remember, was not a bank. It created the front-end user interface, but partnered with an FDIC-regulated bank).
In 2016, Aspiration joined the rest of the financial industry with the launch of their mobile app. Their app allows you to view your Aspiration Account balance and transaction history, remote deposit checks using your phoneâ€™s camera, schedule transfers between the Aspiration Account and other bank accounts, pay bills, and track the impact of your spending habits. The mobile app also allows you to use fingerprint authentication to secure the data.
There are two features that stand out:
Payments is Aspirationâ€™s bill pay feature. Not only does this feature allow you to pay your bills, but it also allows you to pay your friends. However, unlike other bill pay and money transfer features (like Zelle), Aspirationâ€™s Payments feature sends payees a paper check with your name, address, and optional memo if you choose to include one. This feature is available at no charge to the account holder.
Since this feature is sending a paper check, you can expect the payee to receive the check within 5-7 business days from the send date. Fortunately, Aspiration doesnâ€™t limit the number of payments that can be scheduled and they donâ€™t limit the amount of money you can send.
AIM is a pretty unique feature as it allows you to see the impact youâ€™re making on the planet and people based on your spending habits. This feature will provide you with a score that is determined by the types of businesses you frequent. The score is calculated by how the businesses treat their employees, customers, community, and environment. So, businesses are given a score and youâ€™re given a score based on where you do your shopping.
Aspiration shares that they created AIM â€śso that we can all think about how our everyday spending can make the world a better place.â€ť This may sound very â€śkumbayaâ€ť, but thereâ€™s no denying that theyâ€™ve created an innovative feature.
The perfect profile for an Aspiration Account customer today would be:
This account is going to get better over time. It wonâ€™t come as a surprise if this account starts to become much more competitive.
Depending upon what feature is most important to you, there are excellent alternatives:
One of the biggest worries we have at MagnifyMoney is the following: when something looks too good to be true, it usually doesnâ€™t last long. The offer can last for a few years, but eventually market forces will catch up with it.
Providing unlimited reimbursement of ATM fees globally is expensive. Ally originally offered the same perk and then capped that benefit at $10 per month ($120 per year), because it was impossible for them to make money on the checking accounts otherwise. Aspiration does not have a magic formula, and eventually the business will need to make money somewhere.
Often, banks do not make money on checking accounts. Instead, these accounts serve as the foundation account and the bank cross-sells other products. Perhaps this is Aspirationâ€™s plan.
Regardless, the product is very consumer friendly and potentially lucrative. According to CrunchBase, the business has raised over $67 million. Clearly, the business will need to raise more capital as it scales, especially given the low level of customer profitability expected. There is certainly limited risk to taking advantage of the great offer available now. At MagnifyMoney, we just hope that they find a way to make money sustainably. As Ally customers know all too well, it can be frustrating to switch accounts based upon a strong feature (unlimited ATM reimbursement), only to have that benefit taken away when it is deemed too expensive.
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