Aspiration doesn't sound like a name for a bank.
It sounds like a self-help site that shows photos of the author on top of a mountain near Machu Picchu.You know the photo I'm talking about. 🙂
But it is and I think what they are hoping to accomplish is something many other financial institutions should put front and center.
Before we get to their social mission, I want to evaluate them on the basis of a bank. Social good is important but so is personal good. If a financial institution doesn't offer good products, then it's hard to argue that the social mission trumps bad products.
Fortunately, Aspiration delivers on that front too.
About Aspiration “Bank”
First things first, Aspiration is not technically a bank.
Since Aspiration is not a bank, you won't be able to find them on the FDIC Bank Find tool. When you deposit funds, they are swept into an account at an FDIC-insured bank. (for example, if you had an Aspiration Summit account, your funds were kept at Radius Bank, FDIC #32551)
So you have the protection, Aspiration is merely white-labeling a bank's account and offering it to you with their perks.
You may not be aware but this is a common occurrence. A lot of financial startups will use the banking services of a company like The Bancorp Bank to handle the deposit products. The Bancorp Bank is FDIC insured and thus your funds are FDIC insured. If you're familiar with Simple, they used to use The Bankcorp Bank but then moved to BBVA Compass in 2016.
Aspiration Spend & Save Account
This is the name Aspiration gives to their checking (Spend) and saving (Save) products.
Their Spend account comes with a debit card that gives you 0.5% cash back on all purchases. It isn't as good as 1-2% cash back from a credit card but it's pretty good for a debit card. Very few banks offer cash back on debit card purchases.
Their Save account offers a competitive 2.00% APY interest rate, putting it near the top of high yield savings accounts.
There are two added perks worth mentioning that are uncommon with a bank account:
- They offer up to $1,000 in expense reimbursement for identity theft fraud.
- They offer secondary cell phone protection insurance of $600 per claim, $1,000 per 12 month period. It covers damage and theft. Just pay your bill with the Aspiration debit card.
Where is the Summit Account?
If you read other reviews talking about a Summit Account but can't seem to find it anywhere, it's because the Summit Account was discontinued (and those reviews are out of date). The Aspiration Bank Summit Account was the precursor to their current Spend & Save Account. It was an interest-bearing checking account that offered somewhere around 1% APY.
They recently discontinued it but many of the same features are now available in the Spend & Save.
Very Few Fees
Like many online banks, Aspiration doesn't have a lot of fees.
- No monthly maintenance fees (you pay what you want, which can be $0)
- No overdraft fees (they decline transactions that would overdraft you)
- No minimum balances ($10 to open, $0 to maintain)
- Free bill pay & one set of personal checks
They also offer unlimited ATM reimbursement, including international ATMs.
For services with a fee, they charge what it costs them to provide the service. What they charge for a wire transfer is what it costs them to send or receive that wire transfer.
Aspiration Social Mission
Aspiration's social mission permeates a few aspects of the business. Most notably, they donate 10% of earnings to charity.
Another way they embody their mission is by showing you your AIM personal People/Planet impact score. AIM stands for Aspiration Impact Measurement, which is their own proprietary algorithm, which is itself based on where you spend your money. It feels a little self-perpetuating but since this type of calculation doesn't exist elsewhere, it seems to fit.
They calculate the AIM People and Planet scores in this way: “People scores reflect company metrics like employee pay, access to healthcare, workforce diversity, and more. Planet scores are based on metrics such as greenhouse gas emissions, energy efficiency, and renewable energy use.”
Aspiration also has investing products that focus on 100% fossil fuel free investments.
They have a $10 minimum deposits and the two funds are:
- Redwood Fund (REDWX) – Fossil fuel free investing in comapnies with sustainable environmental and employee practices
- Flagship Fund (ASPFX) – A strategy aiming for long-term growth with less volatility than the stock market
Both are publicly available mutual funds so you can pop them into Google Finance or Morningstar to give them a look.
Socially responsible funds have been around for a while and I'm not sure these two are great options considering their expenses. The Redwood fund has a 2.51% expense ratio and the Flagship has a more reasonable (for an active fund) 1.37% expense ratio, according to Morningstar.
Overall, it seems to be a solid online savings account.
The fee model is similar to other online banks, though you may feel guilty not paying a fee when they ask so politely, and the social mission is admirable.