What’s Keeping You From An Online Financial Institution?

What’s Keeping You from an Online Financial Institution?

Let’s be honest. When was the last time you actually walked into your bank’s local branch to perform a transaction? If you are like most people today, you are performing most of your transactions online.

Online financial institutions have a host of advantages over traditional banks.

  • Higher earned interest – Many of the costs incurred by traditional brick-and-mortar banks are nonexistent for online financial institutions. That means that they can afford to pay out higher interest on your deposits. Would you rather earn 0.01% or up to 2.00% APY interest on the money sitting in your account?
  • Fewer fees – Banking fees have been the subject of controversy over the last few years and rightly so. Monthly fees oftentimes wipe out your earned interest for the year and sneaky banks love to charge hidden fees. For example, fees are often activated when you don’t maintain a specific balance or perform a certain number of transactions per month. Would you rather pay $15 a month or $0 
  • Convenience – 24/7 access. Ironically, most traditional bank customers already use online services, and it’s the primary reason for sticking with their bank. Some customers are even charged for online services. Would you rather pay $2.50 to use an ATM, or use any ATM in the world for $0

What’s Keeping You From An Online Financial Institution?

In light of the obvious financial advantages that online services offer, what keeps people from making that switch? People are worried about security; primarily data theft and loss.

Data Theft: While data theft is a valid concern these days, traditional banks are not any safer. Traditional banks store all of your information in big online data centers which are equally vulnerable to hackers. We live in a digital age. That means all data kept by both traditional and online banks is vulnerable to data theft. What’s important is to research the security processes offered by the institution, traditional or not.

Loss: Online banks backed by the FDIC cover losses up to $250,000, just like any traditional bank customer. If you want to find out if a bank is insured by the FDIC, you can check here

What’s the best online banking service?

We think Aspiration deserves your attention.

Here’s a quick overview of Aspiration’s Account:

  • Pays you up to 2.00% APY interest - at least 100X more than the big banks offer.
  • No minimum deposit – you can open an account with $10.
  • No minimum balance – no minimum balance required, ever.
  • No service fees - their Pay What Is Fair philosophy allows you to pick your fee, even if it’s zero.
  • No ATM fees – Aspiration reimburses ATM fees worldwide.
  • FDIC insured
  • Certified B Corp

  • Industry Standard Encryption

What’s not to love?

So, if you are on the fence about whether to move your money from a traditional bank, ask yourself what is holding you back.

Online institutions pay you higher interest rates, have fewer fees and are more convenient than traditional banks with the same level of security and insurance against loss.

It’s your money. Stop giving it away to megabanks and let it work for you.

It’s a Well Wallet smart move.

Based on a comparison of Aspiration’s up to 2.00% APY Interest rate to the following checking account interest rates reported by Bankrate for 2019: Wells Fargo (0.01% APY), Chase Bank (0.01% APY) and Bank of America (0.01% APY).

Aspiration Partners, Inc. and its affiliates are committed  to “All Extra Services Provided at Cost,” meaning that we’ll only charge you what it costs us to provide the extra service (such as a wire transfer), and not a penny more. Besides these at-cost service charges, the only account fee you pay is the fee you choose, even if it’s $0, which is why we call it Pay What Is Fair.

All ATM withdrawal fees will be waived for your Aspiration Summit Account. In addition, your account will automatically be reimbursed for all ATM fees charged by other institutions while using an Aspiration Debit Card linked to your account at any ATM displaying the Mastercard®, Interlink®, Cirrus®, or Maestro® logos. The reimbursement will be credited to the account two business days after the ATM fee is debited from the account. Please note, there is a foreign transaction fee of one percent that is not waived, which will be included in the amount charged to your account.

Deposits are insured by the FDIC up to $250,000 per depositor. For more information about FDIC insurance coverage, please visit the FDIC website. 

, , , , ,
Previous Post
If You Have A Bank Account, You Are Impact Banking
Next Post
What I Wish My Clients Knew When They Were Younger

Related Posts

16 Comments. Leave new

Maria M Calderon
October 12, 2017 11:15 am

How do I deposit a check? Thanks.

Reply

I am curious to learn more about this opportunity. Can you please share with me what you know about the bank I currently use which is USAA because my former husband is in the National Guard. I only always want to be a part of something that creates a world that works for all. Thank you.

Reply

I live in europe. How would it work to have a bank in the USA??? Does that make sense ??
Thanks

Reply
    Suzanne Leigh
    October 16, 2017 2:25 am

    Hi Annette,
    Great question. That really depends. Right now, Aspiration is only available to US citizens. If you are a US citizen and you save US dollars or perform transactions in US dollars, it makes sense because of the APY – the interest rate – and the reimbursed international ATM fees.

    I live in Asia, but I am a US citizen and still need to perform transactions in US dollars. I also want to save US dollars. The tricky thing is that when I applied for the Aspiration account outside of the US, I couldn’t complete the process until I was back in the US. The software could tell that I was out of the country. But I completed it no time when I went back for a visit and my debit card was sent immediately so I was able to take it back to Asia with me.

    So, again, I would say it depends on your situation. If you don’t use US dollars and don’t plan to in the future, it may not make sense to have a US bank account.

    I think we are going to see more sustainable online banking internationally in the future (I certainly hope so anyway) with better interest rates and fewer fees than traditional banks. Aspiration is one of the first players in this space. I’m always looking for them because being an expat comes with it’s own special kind of twists. An international bank with a set up like Aspiration has would be fantastic. If you run across any online banks in the EU that are similar to Aspiration, we would love to hear about them!

    Reply

What do you know about Capital One Bank (used to be ING)? We recently had our accounts hacked but they caught the thieves within 10 minutes and stopped their withdrawals. I like them but how do I find out more – especially where they make their money?

Reply
    Suzanne Leigh
    October 17, 2017 3:41 am

    Hi Jo

    We love that you are asking questions like these. It is so important!

    Research. Decide.

    I did a quick search on them and this is what I found:

    You can read their 2015 Capital One’s Social Responsibility platform on their website. https://www.capitalone.com/about/social-responsibility/ They don’t appear to have updated it recently.

    And they also appear to be invested in coal.

    http://archive.greenamerica.org/take-charge-of-your-card/does-your-credit-card-support-big-coal.cfm

    Their APY is listed on their website. (Go to Checking Account – Rates.)

    $0 – $49,999.99 0.20%

    $50,000.00 – $99,999.99 0.75%

    $100,000.00 or more 1.00%

    This is why we like banks that are completely transparent. No guessing. No surprises.

    While I am not going to directly accuse capital one of “greenwashing”, (publishing an in-house report on how they are lowering carbon emissions in their buildings whilst allegedly being invested in coal,) I will admit that it is difficult to nail banks down to what they are really doing with your money. I would do more research to corroborate what I have found in this quick search.

    Only you can decide whether the information that you find carries enough weight to quit them or if they pass your test. Beyond that, how do their interest rates compare? Are you getting the best deal?

    Remember, it is your money and your values. It is a very personal decision.

    Reply

I checked out aspiration bank and it said you have to still have a traditional bank account to link it to. I don’t understand what the point is if I have to keep my other account. I could use it for savings, I suppose, but I would rather invest and get more interest than 1% on my savings. Right now I have a zero fee bank account and no charges for using my ATM card at the bank with great service. The only reason I was considering changing was for socially conscious banking.

Reply

    Hi Chris,

    You only need to link a bank account in order to fund the initial $10 deposit required to open an Aspiration Checking Account. After that you can unlink that account and even close it if you like.

    If you are interested in Aspiration’s Redwood Fund, you would need to link a bank account to fund that, but you do not need to open an Aspiration checking account to invest. You can use any account you like.

    Reply

Hello, i live in Europe in a country named Portugal which has for neighbour Spain, i love it and i also love green banking, can you help me with choosing one that works for me here in Portugal?

Reply
    Suzanne Leigh
    December 3, 2017 6:34 pm

    Hi Joao,

    Thank you for your reply! We are working on finding global partners. Stay tuned ????

    Reply

      Hi,
      I saw a documentary from Spain a couple of years ago, at the time there were no banks like these in the US, anyway, they talked about “sustainable banking”, and Triodos bank was mentioned, they have branches in some countries in Europe..
      https://www.triodos.com/en/about-triodos-bank/

      Hope it helps, at the time I was dissapointed nothing like that existed here in the US, it’s good to see the options are growing..

      Reply
        Suzanne Leigh
        April 5, 2018 5:19 pm

        Thanks, Joquebed! Very interesting. Appreciate the share. I agree with you. It is good to see that the options are growing.

        Reply

[…] Related:  What’s Keeping You From an Online Bank? […]

Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Menu
Disclosure: this article contains affiliate links. We keep you, the planet and its humans in mind when choosing affiliate partners. Here's our process for choosing partners, and how we pay our writers, developers, and artists.