Are you concerned that some of your financial choices are harming the planet?
If you want to take a more socially conscious approach to managing your finances, the Aspiration Spend & Save account might be the answer for you.
Aspiration bills itself as “a new kind of financial partner that puts our customers and their conscience first.” It donates to charity 10% of each dollar that customers choose to pay in fees. (Yes, you decide whether and how much to pay in fees — more on that below.)
With its cash back and an interest rate well above the national average — plus the promise that your deposits won’t go toward funding firearms, fossil fuels or private prisons — the Aspiration Spend & Save product is an account you can feel good about. Right now, Aspiration is offering new customers $100 credit when you reach a total $1,000 spent using your Spend & Save debit card.
What is the Aspiration Spend & Save account?
First, it’s important to understand that Aspiration is a broker-dealer registered with the Securities and Exchange Commission, not a bank.
The money you keep in your Spend & Save account is actually held at partner institutions. Aspiration’s partners are insured by the Federal Deposit Insurance Corp., and your money is covered by that insurance, up to $2 million per depositor.
The Spend & Save account is a cash management account that pays an annual percentage yield (APY) of up to 1% on savings while providing you cash back for each dollar you spend when using your debit card. On top of that, you get extra cash back when you spend money at socially conscious businesses.
Another feature offered by the Spend & Save account is the ability to track your financial carbon footprint. Your online account dashboard shares information about the companies where you spend your money — including how they score on environmental sustainability and employee policies.
Aspiration also prides itself on its approach to fees, offering a monthly fee that is based on what the customer thinks is fair. You can opt to pay a monthly fee in an amount of your choosing, or opt to pay no monthly fee at all.
Aspiration says it provides other services at cost, meaning it charges you a fee that is equal to what it costs Aspiration to provide the service. Some of the services provided at cost include:
- An expedited debit card
- Returned item (such as a check)
- Wire transfers
“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,” says Aspiration’s fine print.
Unlike some banks, the institution doesn’t even charge a daily overdraft fee.
Pros and cons
So, to recap, the advantages of the Aspiration Spend & Save account include:
- Cash back you spend with the debit card at places like Walmart, CVS and Target
- Extra cash back when you spend with socially conscious businesses
- Competitive interest rate on savings
- Free ATM access domestically at 55,000 Allpoint ATMs
- Ability to track your impact on people and the planet through a “personal sustainability score“
- Deposits in your Aspiration account are FDIC insured up to $2 million per depositor.
The downsides include:
- Limited product offerings (no certificates of deposit, for example)
- Limited customer service options (no live chat, and limited weekend hours for phone service)
- No brick-and-mortar branches
- A 1% foreign transaction fee on international ATM transactions
Who is it for?
For the most part, the Aspiration Spend & Save account is ideal for someone who wants simplicity in banking and who wants their money to be used in ways that are positive for the planet and other people.
If you’re looking for a reasonably competitive rate for your savings and you want a fee-free checking account, the Aspiration Spend & Save account can make a lot of sense.
You’ll earn up to 1% APY, which isn’t the highest rate when compared with some online savings accounts, but it beats the APY on many accounts. As of June 15, the national average APY for savings accounts is only 0.06%, according to the FDIC; for money market accounts, the rate is 0.09%.
Additionally, if you want to be more conscious about where you spend your money and who it’s benefiting, this account can be a good choice.
You can see what kinds of companies you do business with, and Aspiration guarantees it won’t deposit your money in a way that benefits fossil fuel exploration or production, firearms or private prisons.
On the other hand, you won’t be able to use Aspiration as a one-stop banking solution since it doesn’t offer credit cards, loans or other banking services.
The Spend & Save account allows you to hold yourself accountable as well as give to charity, and Aspiration’s investment choices focus on sustainable and socially responsible options.
If you’re looking for a company that does things a little differently and you’re conscious about how you grow your wealth, Aspiration makes a lot of sense.