Aspiration Bank Review - Everything You Need to Know
Is an online-only bank account right for you?
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Aspiration Bank is an online-only bank offering interest-bearing checking accounts as well as investment products. The bank's focus on doing well, while doing good is reflected in its commitment to giving back to charities around the world.
Who Is Aspiration Bank Best For?
Aspiration Bank may be a good choice for customers who want the convenience of banking online, without the need to visit a branch. It might be right for someone who wants to:
- Pay no monthly maintenance fees on checking
- Avoid ATM fees
- Invest and save for the future
- Support charitable causes
Zero ATM fees at every ATM in the world
Competitive annual percentage yield (APY)
Low-minimum opening deposits
The company contributes to charities around poverty, clean water, education, environment, health, human rights
Pay what you think is fair for extra banking services, even if that's zero dollars
No savings, money market or CD accounts
No physical branches
Limited investment options
No online bill pay, and person to person payments are not electronic
Types of Accounts
Aspiration Bank offers the following account types:
- Summit Account (Checking Account)
- Investing Accounts
- Retirement Accounts
Learn more about each type of account Aspiration Bank offers below.
The Aspiration Bank Summit Account is an interest-bearing checking account that you can open with as little as $10. The account earns an APY of one percent, which according to the bank's website, is up to 100 times better than the interest rate offered at big banks.
Aside from earning interest on deposits, the Summit Account offers another benefit through its fee structure.
With this account, you pay no:
- Minimum balance fees
- Monthly service fees
- Overdraft fees
- Stop payment fees
- Foreign ATM fees
With a Summit Account, you can access your money from any ATM in the world fee-free. Aspiration Bank reimburses you for any foreign ATM fees or surcharges you pay, either at a machine in the U.S. or overseas. That sets it apart from other banks that offer ATM fee reimbursement but only up to a limited amount each month.
Aspiration Bank does charge a fee for incoming and outgoing wire transfers. But, those fees are a bargain at $0.82 each.
You have the option of paying more for extra banking services — but only if you want to. Aspiration gives you the ability to pay fees, up to the amount you think is fair, even if that's zero dollars.
You can open an individual or joint account and Summit Accounts are FDIC-insured, up to $250,000. In addition to accessing your account at the ATM using your debit card, you can also check your balance, schedule transfers or make bill payments with the Aspiration Bank mobile app for iOS and Android.
Other account perks include:
- Identity fraud expense reimbursement in case your account is ever hacked
- Cell phone protection insurance
- Personalized Sustainability Scores, which let you see the impact you're making socially and environmentally, based on how and where you spend
Aspiration Bank also offers two investment options if you're interested in potentially earning a higher return than the Summit Account offers. Both are sustainable mutual funds that include a collection of stocks and bonds that are 100 percent fossil fuel-free. These are professionally managed accounts, which means you have the benefit and expertise of a knowledgeable investment team.
Redwood Fund (Ticker symbol: REDWX)
The Redwood Fund includes a mix of companies that adopt sustainable practices with regard to social issues, governance and the environment. That includes increasing workplace diversity, focusing on green initiatives to reduce their carbon footprint and supporting human rights.
The fund is diversified across different sectors, including financials, information technology and health care. It takes just $100 to make an initial investment in the Redwood Fund and you pay no:
- Front load fees
- Back load fees
- Per transaction fees
- Performance fees
There is an annual fund operating expense fee of 0.5 percent of assets, which is a bit higher than what you may find with other investment accounts.
Flagship Fund (Ticker symbol: ASPFX)
The Flagship Fund is a little different than the Redwood Fund. Instead of focusing exclusively on socially responsible investing, this fund is designed for investors who are looking for minimal volatility. In other words, it's designed to ride out the high and low points of the market.
You can invest in the Flagship Fund with as little as $100. The fund's investments span a wide range of asset classes, including managed futures, options, bonds, and equities. It's simplified diversification in a fund package that's intended to help investors manage risk appropriately.
Similar to the Redwood Fund, you pay no:
- Front load fees
- Back load fees
- Per transaction fees
- Performance fees
- Redemption fees
Once again, the 0.5 percent operating expense fee applies.
With the Redwood and Flagship funds, you're investing in a taxable account. Simply put, that means you pay capital gains tax if you sell any part of your fund shares for a profit. If you're looking for a tax-advantaged way to save for retirement, Aspiration Bank offers two options.
The Redwood IRA follows the same investment strategy as the Redwood Fund, with an emphasis on sustainability. The key difference is that this is a traditional IRA, which means:
- Annual contributions are generally tax-deductible
- Contributions grow on a tax-deferred basis
- Qualified withdrawals are taxed at your regular income rate
- With some exceptions, a 10 percent early withdrawal penalty applies for non-qualified withdrawals
- Required minimum distributions begin at age 70 ½
The minimum to open a Redwood IRA is $100. The maximum contribution is $6,000, plus another $1,000 in catch-up contributions if you're age 50 or older.
The Flagship IRA adopts the Flagship Fund approach to retirement saving. Just like the Redwood IRA, this is a traditional IRA with a $100 minimum deposit.
There are no income restrictions or limits on who can open a Redwood or Flagship IRA. You may, however, be limited as to how much of your contributions you can deduct based on your filing status and whether you're also covered by a retirement plan at work.
The same fees that apply to the Redwood and Flagship funds apply to the Redwood and Flagship IRAs.
Aspiration Bank: Focused on Giving Back
Aspiration Bank is dedicated to furthering good works, through both its investment choices and its own charitable efforts. The bank's "Dimes Worth of Difference" program is a commitment to donating 10 cents of every dollar in company revenues to charitable activities that foster positive economic impacts at a community level. Their primary partner in giving is Accion, a microloan lender that helps small business startups.
Aspiration also makes it easy for you to give through your Aspiration account and track your giving activity. You decide how much you want to give to the charities you care about most from one of seven dedicated giving categories:
- Clean water
- Human rights
- Aspiration Operation Fund (for small business microloans)
This is in line with Aspiration's emphasis on being fair while encouraging their customers to put their conscience and the planet first. All the organizations you can donate to are verified non-profits so you can claim your donations as a charitable deduction at tax time.
Opening and Managing an Aspiration Bank Account
Since Aspiration is an online bank, account opening takes place online. Anyone can open an account if they're 18 years old or older and have a U.S. Social Security number.
Opening an account is quick and simple but you will need a bank account at another bank or credit union to make your initial deposit. And of course, you'll need to give Aspiration your name, address, date of birth, Social Security number and email address to complete the process.
The Aspiration Bank mobile app has all the features you'd expect in a mobile banking app that are most important for managing your money, including:
- Mobile check deposit
- Account summaries
- Integrations with PayPal, Venmo, Mint and digital wallet apps
- Bill pay
- Person to person payments
One note about bill pay and person to person payments — they're not electronic. When you schedule a payment, Aspiration sends a paper check to the payee with your name and address printed on it. While it's good to have the payments option, it's a slower way to pay compared to electronic transfers offered by other banks.
You can also use the app to check the value of your Aspiration Bank investing accounts and buy or sell shares of Redwood and Flagship funds. Fingerprint sign-in is allowed on certain devices and the app supports two-factor authentication for enhanced security.
If you need help with an account question or issue, customer service is available by phone at 800-683-8529 on these days and times:
- Monday through Friday, 7 a.m. to 5 p.m. PST
- Saturday and Sunday, 9 a.m. to 4 p.m. PST
You can also send your question or concern by e-mail and follow Aspiration on Twitter, Facebook and YouTube. Some of the most common account and banking questions are answered on Aspiration's Q&A page.
About Aspiration Bank
Aspiration Bank is a financial services firm based in Marina Del Rey, California. The bank is run by a team of people with diverse backgrounds in government, business, tech and finance. In late 2017, the startup raised $47 million in Series B funding. Dubbed a "neobank", Aspiration challenges the traditional banking model with its online-only structure, emphasis on giving and "pay what you think is fair" approach to fees.
The Bottom Line
BENEFITS The biggest benefit of opening a checking account with Aspiration Bank is not paying any fees. That's rare, even for online banks which often lower their fees to compete with bigger brick-and-mortar banks. Earning interest on your checking balance is also a nice perk; it's almost like doubling your checking account as a savings account. And, being able to use any ATM, anywhere in the world without paying a surcharge is appealing if you travel often for work, school or just for fun and regularly make cash withdrawals.
DRAWBACKS Aspiration Bank's drawbacks lie chiefly in what it doesn't offer: savings accounts, money market accounts, CDs, loans, online bill pay. These are all features that most online banks have so in that respect, it's a little behind the competition. But the bank's CEO has referred to plans to increase Aspiration's product line in the future, so it's possible those things could be added. Finally, as with any online bank, there's the drawback of not being able to visit a branch to speak to someone in-person or deposit cash to your account if needed.