Aspiration Financial Review – Forbes Advisor

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Aspiration likes to overshadow competition. Last year he used Twitter to make fun Bank of America’s paltry savings interest rate. In honor of Earth Day this year, he called on consumers transfer their money from big banks like Wells Fargo, BofA and Chase he says he supports the fossil fuel industry.

Since opening its online doors in 2015, Suction has reached out to consumers who are fed up with traditional banking and Millennials wanting to hang out with the right companies. For example, it donates 10% of its revenue and offers a built-in functionality that guides Aspiration’s clients to businesses that are eco-friendly and people-friendly. Users can even get a sustainability score on their own spending habits.

To be clear, Aspiration is not itself a chartered and federally insured bank. It is a brokerage firm offering a cash management account like the Fidelity Investment cash management account. And like Fidelity, it uses relationships with banks to ensure that the money in your “Spend and Save” account is protected by the Federal Deposit Insurance Corp or the FDIC. (Any securities you hold through Aspiration will be protected by Securities Investor Protection Corp. instead)

So how, beyond wellness marketing, does Aspiration compare to a bank replacement?

Aspiration Spending and Savings Account

Originally, Aspiration offered a single check-type account that got noticed by paying a high yield of 1% APY. This beat the yields you would see at some well-known mainstream banks that only offered 0.01%.

In 2019, Aspiration announced that it was replacing its checking account with what it calls a “Spend & Save” account. The new account offers a spending account attached to a debit card and a savings account paying 2%. Although these are technically two accounts, it is intended to function for the consumer as one transparent Aspiration account. Plus, there are still few to no mandatory fees and Aspiration boasts of being 100% fossil fuel free.

Characteristics

Bill payment: Yes

Mobile check deposit: Yes

Fraud Protection: Yes, and users can get up to $ 1,000 in refunds for identity fraud

Debit card : Yes

Rewards: Offers up to 0.5% unlimited cash back on every dollar spent. Aspiration offers 0.25% cash back for all purchases, but you will receive a 0.5% bonus cash back for your purchases at businesses with high scores of “Aspiration Impact Management” ( AIM).

Annual percentage return: 2%

Other insurance: Up to $ 600 in cell phone insurance when you load your monthly bills on the Aspiration Mastercard.

Security functions: Automatic logout and multi-factor authentication

FDIC Insurance: Yeah, up to $ 2 million a night. Let me explain. During the day, your funds are held at the Coastal Community Bank, from where debit cards are also issued. That’s up to $ 250,000 in FDIC insurance per type of account (checking accounts and savings accounts). At night, your funds will be transferred to a network of FDIC member banks that you will be notified of. The network extends your FDIC insurance coverage from $ 250,000 to $ 2 million.

Costs

ATM fees: You can use any domestic ATM machine and get your money back. You will also be reimbursed up to $ 4 for international withdrawal fees. (You cannot make deposits at these ATMs, only withdraw cash.)

Monthly fee: $ 0 mandatory fee, but Aspiration asks you to “pay us a monthly fee that you deem fair”

Overdraft fees: $ 0

Debit card : $ 35, if accelerated

Bank transfers : $ 0.82 for the domestic; $ 2.50 for incoming international and $ 15.00 for outgoing international

Stop payment fees: $ 0

Foreign currency transaction fees: Yes, and it will not be refunded

Aspiration investment accounts

Of the four investment products offered by Aspiration, two are dedicated to sustainable investing, also called environmental, social and governance (ESG) investment. These are the Redwood Fund and the Redwood IRA.

The other two products, the Flagship Fund and the Flagship IRA have a low volatility theme. These funds target risk averse investors. Both funds are made up of other funds with strategies that minimize the ups and downs of the overall market and produce risk-adjusted returns. They all require a minimum of $ 10 as an initial deposit, allowing average Joe investors to access portfolios only available to Aspiration clients. In addition, all securities are insured by the Securities Investor Protection Corporation (SIPC) up to $ 500,000.

The Redwood Fund and the Redwood IRA invest in companies that actively participate in ethnic diversity, gender diversity, better ethics and the fight against climate change. The account is managed by UBS Asset Management. The flagship products are under Emerald Asset Management.

Retirement accounts are traditional tax-deferred IRAs.

Since Aspiration is partnering with an outside company to offer its investment products, underlying charges may exist. Aspiration indicates that it will notify you of all charges “in advance”. On top of that, the Redwood and Flagship product lines are free of charge.

Costs

Sales commission (front or rear): $ 0

Transaction fees: $ 0 per transaction

Performance fee: $ 0

Redemption fees: $ 0

Third party: Yes, it is a capped amount

After combing through the products and features of Aspiration, here are its pros and cons for customers.

Advantages

  • Competitive interest rate on the savings account
  • Socially conscious
  • Little or no cost

The inconvenients

  • No possibility to deposit money
  • The best way to reach customer service is by email
  • $ 35 for an accelerated debit card

How suction is stacked

Aspiration is an alternative to banking, especially for customers who are fed up with traditional banks. It is transparent about its fair compensation costs model. It has a high interest rate Spend & Save account and reimburses customers at ATMs. Aspiration has some good feel-good characteristics, but there are some things that make it difficult to fully engage with your platform.

On the one hand, there is no way to deposit cash, which is the biggest problem. online banks have. And that could be a potential problem for people who need to put money into their account quickly to pay a bill or transfer money.

The other problem I have is that customer service is more responsive to emails than phone calls. If Aspiration is to assign AIM scores to other companies and go after other financial institutions, it should offer more customer support options, such as a chat feature and hotline representatives for the number. phone number it provides on its website. The company is still young and growing, so there could be more development in this area.

As a cash management service for the non-wealthy and socially conscious, Aspiration is awesome. It does not limit the number of refunds you will receive from ATMs and there is no minimum balance to maintain. Plus, you can use your money to align your finances with a good cause while earning interest.

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