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The fact that Aspiration is still offering up to 5% interest on savings is enough to get people’s attention, even as interest rates continue to rise in late 2022.
If you’re wondering if there are any pitfalls, yes there are some.
Aspiration focuses on environmental and social issues and leverages current account products, credit cards and investment funds. So, if your values align, you could be the perfect company to do financial business with.
However, you will not receive the 5% interest (free and transparent) on the amount you save through Aspiration.
table of contents
What is aspiration, is it a bank?
Founded in Marina del Rey, California in 2013, the founders opened Aspiration two years later.
Like Chime and other fintech companies, Aspiration isn’t really a bank. However, it works with partner banks and offers the equivalent of checking and savings accounts.
Aspiration calls itself a “clean money” company. It criticizes America’s Big Four banks. (Money expert Clark Howard also hates big banks, but for different reasons).
Aspiration criticizes these banks for lending “more than $210 billion in customer money to fossil fuel projects” each year.
The company launched the Aspiration Redwood Fund in 2015. This is a mutual fund that avoids investing in companies involved in alcohol, tobacco, weapons manufacturing, gambling, oil, etc.
Aspiration pledges to donate 10% of profits to environmental and social charities.
All of the company’s products are equipped with features that address environmental concerns. This will be covered in detail in the rest of this article.
Aspiration Plus: Costs and Benefits
If you want to go all in on Aspiration, consider our premium Aspiration Plus subscription.
At a cost of $71.88 billed annually or $7.99 ($95.88) monthly, Aspiration Plus offers a great collection of perks.
- Up to 5% APY on your first $10,000 savings (specific conditions detailed below)
- Up to 10% cash back on purchases at 36 ‘Conscience Coalition’ brands including Warby Parker, Blue Apron and Allbirds with your Aspiration debit card
- Planet protection. Offset your gas purchases with carbon credits to neutralize your environmental impact.
- Debit card made from recycled ocean plastic*
- Option to round up purchases to the nearest dollar and allow Aspiration to plant trees using change*
- Free reimbursement of $1,000 impersonation fee*
*This is not limited to Aspiration Plus.
The benefits are great. And they can. However, depending on how much money you have in your savings account and how much you spend at the companies included in Aspiration’s Conscience Coalition, you could be making hundreds of dollars a year after paying your subscription fee.
Aspirations can outpace many of the best online savings accounts and cashback credit cards, within some fairly specific limits. , is much more attractive.
(Incidentally, identity theft refunds are a good proposition, but Clark has a better one. Freeze your credit.)
Desired Spending: Equivalent to a checking account
Aspirations are like online banking.
There are no physical branches. A minimum deposit of $10 is required to open an account. You can fund your account from another bank balance or through payment apps like Venmo.
With a unique touch, you can decide your own bank charges. You can choose $0 if you want, and change that amount at any time.
The Aspiration app also allows you to see your personal sustainability score for each purchase. In short, Aspiration provides a score based on every company that does business, helping you compare options with sustainability practices in mind.
Receive a free set of checks and free access to over 55,000 ATMs (through the Allpoint network). If you set up direct deposit through your employer, you can also get paid up to two days in advance.
Your debit card cannot be used for transactions in certain countries.
As Aspiration emphasizes, we do not invest your deposits in oil companies.
Aspiration Save: The equivalent of a savings account
Can I earn 5% interest on my savings through Aspiration? Yes.
Your dollar does not have its own bank charter, but is insured by the FDIC through Aspiration’s partner banks.
And even if you paid for Aspiration Plus, you still need to spend $1,000 or more per month on your Aspiration debit card to earn more than 0.25% APY on any of your balances.
Also, the highest interest rates (3% for Aspiration and 5% for Aspiration Plus) only apply to your first $10,000 savings.
Here’s a diagram to make these terms a little easier to understand.
aspiration.com
Most people should work toward establishing an emergency fund with $10,000 or more. This is in addition to saving for vacations, cars, college education, home down payments, etc.
Clark advises people to use another bank for their checks and savings. So even if he’s under $10,000 he gets 3-5% of his APY and if he wants to support the cause of Aspiration, there’s nothing wrong with that.
Just know that you won’t earn much interest unless you spend at least $1,000 a month on your Aspiration debit card and limit your balance to $10,000 or less.
Other suction products
aspiration credit card
The Aspiration Credit Card has an annual fee of $60.
Not only do we offer up to 1% cashback on your purchases, but we also offer a $300 sign-up bonus when you spend $3,000 eligible within a certain period.
Aspiration says he plants a tree every time he spends money on his credit card. We round up each purchase to the nearest dollar and give you the option to plant an additional tree.
The website touts special offers for food delivery, carbon-neutral trackers and credit cards made primarily from corn.
Aspiration Investment Fund
Seven years old, this fund is one of the oldest and most established ESG funds.
ESG stands for environmental, social and governance investments. All investments in ESG funds are subject to rigorous environmental impact (pollution, waste, emissions), social behavior (charity donations, employee treatment), and governance (diversity leadership, transparency) standards must be adhered to.
final thoughts
If you care about your environmental impact and want to pass your checks and savings to a company that shares your values, Aspiration is for you.
Aside from these values, aspirations are a restrictive and niche option for saving.
Spend at least $1,000 a month on your debit card, pay a $72 annual fee, and limit your savings to $10,000 to get 5% interest, far better than the best high-yield savings account. there is.
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