Money at 30: Aspiration Online-Only Bank Review

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Money at 30: Aspiration Online-Only Bank Review

There was once a time when I thought perhaps I had too many bank accounts. Yet, since then, I’ve only found more attractive accounts to open. One of the latest additions to my roster is Aspiration, where I opened up an account at the end of last year.

As luck would have it, before I had a chance to test all of the features of Aspiration, they made some sizeable changes. So were these changes for the better? And how do Aspiration’s other features stack up against various Internet banking offerings? Let’s take a closer look at what Aspiration has to offer customers and what makes them stand out in the increasingly crowded field of online-only banks.

What is Aspiration?

Aspiration is an online bank with some high, well, aspirations. With taglines such as “Do Well. Do Good.” and “Save Money, Save the Planet,” the company puts as much of an emphasis on charity and ecological impact as it does on personal finance health. In fact humanitarian and Oscar-winning actor Leonardo DeCaprio is among Aspiration’s investors.

There are many areas where Aspiration’s Earth-saving endeavors shine through, such as their Redwood Fund and Redwood IRA products that promote sustainable investing. Additionally the bank donates to various causes and makes it easy for its customers to do the same. However, for the rest of this review, we’ll be looking specifically at Aspiration’s banking features and how they compare to other offerings.

Recent changes

Earlier this year, Aspiration announced it was changing a few things about their accounts. For one, instead of a single account they dubbed “Aspiration Summit,” the bank created Aspiration Spend and Aspiration Save accounts. The biggest positive to this change was that the bank doubled its APY from 1% to 2%. However, to earn this interest, funds would first need to be placed into the Save account. Additionally customers must deposit at least $1 a month into any of their Aspiration accounts (or have a balance of at least $10,000 or higher for a minimum of one day per month) in order to earn to that 2% APY. Failing to do so will, sadly, result in a 0% interest rate for the month.

To their credit, Aspiration has been very accommodating with this change. For example current users like myself were able to keep their current debit cards. Also, realizing that some users may not have been aware that they needed to move funds to their Save account to earn interest, Aspiration actually gave users 1% on their Spend balance in addition to the 2% on Save funds. Presumably this was a one-time thing but it was certainly a nice gesture. I also appreciate that Aspiration has sent reminder e-mails nudging me to make my monthly transfer and score that 2% APY.

What’s Good About Aspiration

FDIC-insured

Before we go any further, rest assured that deposits to Aspiration are FDIC insured up to $250,000 per depositor just like any other bank. Enough said.

“Pay What is Fair”

Aspiration doesn’t charge many of the fees that traditional banks do. There’s no minimum balance fee, overdraft fees, maintenance fees, etc. Instead the bank asks its customers to sustain them by paying a monthly fee of their choosing — even if that amount is $0. Overall this is a good system that has the potential to save you money versus many brick-and-mortar banks.

Cash back on debit card purchases

Incidentally this is a feature of Aspiration I have yet to use but is definitely worth discussing. Along with the other recent changes to Aspiration accounts, debit card purchases now yield cardholders cash back. However, this particular feature has continued to evolve and not so much for the better.

The bank has developed its Aspiration Impact Measurement (AIM) that evaluates “how a business treats People (employees, customers and community) and the Planet (environment).” When the cash back debit feature was first announced, if you used your debit card to make a purchase at an establishment with a high AIM score, you’d earn 1% cash back. Meanwhile if the business has a lower AIM score or has yet to be evaluated by Aspiration, you’d earn 0.5% cash back on your purchase. Even back then it was a bit unclear what constitutes a high or a low score but, in any case, that system has changed.

Now, all purchases on your Aspiration debit will only yield you 0.25% cash back while patronizing “businesses with the highest AIM scores” will earn you 0.5%. This time, however, they provide a list of stores eligible for this higher cash back rate (accurate as of July 12, 2019):

  • Adobe Systems
  • Aetna
  • Allstate
  • Apple
  • AT&T
  • Boost Mobile
  • Boots
  • Cricket Wireless
  • CVS
  • DirecTV
  • eBay
  • Esurance
  • Google
  • Jet.com
  • MetLife
  • Microsoft
  • Page Plus Cellular
  • Skype
  • Sprint
  • Target
  • Verizon
  • Walmart
  • Xbox

Even as someone who doesn’t plan on really using this feature, this change is pretty disappointing. While I’m thankful to have a bit more clarity on what qualifies for which tier — and there are least a few places on the list where I shop with some regularity — cutting the cash back rates in half makes this feature even less viable. Instead, if cash back checking is what you’re after, Discover offers 1% back on up to $3,000 in debt card purchases per month. Plus, if you trust yourself with a credit card, there are plenty of options that will pay you far more than 0.25% back.

The bank has developed its Aspiration Impact Measurement (AIM) that evaluates “how a business treats People (employees, customers and community) and the Planet (environment).” If you use your debit card to make a purchase at an establishment with a high AIM score, you’ll earn 1% cash back. In the event the business has a lower AIM score or has yet to be evaluated by Aspiration, you’ll earn 0.5% cash back on your purchase. From what I can find, it’s unclear what constitutes a high or a low score and, like I said, I have yet to experience this myself. Nevertheless cash back is always a good thing.

High APYs

On a brighter note, as mentioned earlier, Aspiration recently doubled the amount of interest it pays and is now offering 2% APY on savings. That may not be the highest you can find but it’s still strong. Interest is paid on account balances monthly, allowing some of that sweet, sweet compounding to occur. Considering I joined Aspiration for the combination of 1% APY and the next feature we’re going to discuss, having that interest rate double to 2% makes this banking option even better.

ATM fee reimbursement — even international

Last but not least, Aspiration boasts that it allows its customers to use any ATM in the world for free. No, this isn’t the result of some massive partnerships that span the globe. Instead it just means that the company will reimburse any fees you may incur for using an ATM domestically or abroad.

On my recent trip to Hong Kong I got to try out Aspiration’s ATM fee refund first hand. I have to say I was a bit worried as I approached the Bank of China ATM at the Hong Kong Airport, Aspiration card in hand. Truth be told, I was depending on the card to work as I required cash to take a cab to my hotel. Thankfully, after entering my card, typing my pin, and opting into any fees I might incur (and that Aspiration would hopefully cover), I was able to walk away with $200HKD in hand.

Fairly soon after this transaction, I could see it pending on my account — except it was converted to the sum of $25.53. That’s actually what Google says the conversion should be, so it didn’t seem as though any fee had been applied. Nevertheless, a few days later, a $4.00 credit for “Int’l ATM Fee Rebate” appeared in my account. At first I thought this $4 credit was just a note reversing a separate fee I hadn’t seen but, running the math, it would seem that it actually added $4 to my account. I used ATMs twice more while in Hong Kong, netting similar results.

Looking into this further, I found that Aspiration’s help center notes “International ATM fees are reimbursed at a flat rate of $4.00 per transaction.” They add that, if you’re charged more than $4, you can submit a photo of your receipt to receive full reimbursement. However, in my case, evidence would suggest I was never actually charged an ATM fee and, instead, earned $4 just for taking out money. Now, I have to say that this was not my intention nor do I condone taking advantage of the apparent loophole… but there it is. In any case, my overseas ATM experience — one of the main reasons I was attracted to Aspiration — was quite a success.

The Downsides of Aspiration

About that monthly fee

In the “What’s Good About Aspiration” section, I explained the institution’s Pay What is Fair fee policy. While it’s true that you can elect to set this fee to $0, I couldn’t bring myself to do it. Heck, I felt bad enough reducing their initial $5 a month fee recommendation to the $1 I landed on. But here’s the thing: there are other online banks that offer near what Aspiration does that don’t charge any fees and don’t even ask for voluntary payment. I suspect I’m not the only one paying a higher fee to Aspiration than they otherwise would just because of guilt, making this a slight negative to the service. Then again, Aspiration does gives 10% of these fees to charity, so now I’m back to feeling bad that I even wrote this!

P.S. — whether you’re feeling more generous or decide it’s time to lower your fee, you can always do so by going into Settings > Fee Settings and adjusting from there.

Slow transfers

I’m not sure if I’m just impatient but it seems that external transfers to Aspiration take a bit longer than normal. Perhaps that’s because they don’t even display as pending in your account (you’ll have to hit the “transfers” tab to see it, assuming you initiated the transfer from Aspiration itself). This has led to a couple of times where I worried that something was wrong. Of course this fear was only compounded when I got an e-mail from the bank saying one of the transfers I launched had failed. It turns out that was just a glitch that affected a few customers around the time of the big Save and Spend split, but it only made this speed issue more evident.

Few balance details 

Earlier I noted that I wasn’t sure if the $4 ATM fee credits I was receiving were extra money or just leveling me out from a charge I didn’t see. Well part of the reason for the confusion is that Aspiration doesn’t display all of the balance data that other banks would. As far as I can tell, there’s no way to view a running total of how transactions affected your balance. Because of this, I simply had to go all the way back in my transactions, total them up one by one, and see if my math mirrored my current balance (it did, which is how I know those $4 credits were extra money). Eventually I did find where you can download a monthly account statement in Settings, although this wasn’t terribly helpful either.

Quite honestly, since I’m using Aspiration more as a place to stash extra cash and really only use the debit card for ATM access, these quirks aren’t a huge deal. However I could easily see this being a problem for those who intend on using their accounts full time.

No joint accounts

When I opened my Aspiration account, my intent was to make it a joint account by adding my wife. Unfortunately it seems no such options exists. Lest you think that adding a  “Trusted Contact” will do the trick, the bank advises it is not a beneficiary but, instead, a “person we will contact in the event you are unreachable when action must be taken on your account.” What’s really odd is that, in account info, there’s a section that says “Account Owners” — yes, there’s a plural!

Poking around online, it seems that Aspiration is working to introduce joint accounts. That said it also appears that they’ve been declaring that for a while. Their latest timeline according to replies on Twitter in March 2019 is “Definitely not longer than a year!”

Final Thoughts on Aspiration

There’s clearly a reason why Aspiration has been getting so much publicity as of late. In addition to their unique business model and humanitarian efforts, they also offer a number of banking features that can help customers save money. Personally the 2% APY on savings coupled with free ATM access anywhere in the world is nearly enough for me to sing its praises.

At the same time I do wish a little more attention to detail went into Aspiration’s interface. Their stripped-down balance and transaction dashboard could be frustrating for those looking for a blow by blow recap, while slow transfers can cause anxiety when you’re chasing that 2% interest. I’m also still waiting for the day when I can finally add my wife to the account, making it easier for her to contribute as well. Lastly, while the amount of cash back Aspiration does offer on debit purchases is still certainly more than any big bank is likely to give you, the low base rate and limited number of locations in the higher tier make this feature kind of a dud.

Overall what Aspiration offers in terms of APY and ATM access is still enough for me to maintain my account alongside my Discover Bank account and others. Furthermore I suspect that those looking to really make an impact with their money will flock to the online alternative to the “too big to fail” banks. For all of those reasons, I’d say it’s likely worth setting your sights on Aspiration as long you’re not looking to make it your main bank.

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Also published on Medium.

Author

Kyle Burbank

Kyle is a freelance writer and author whose first book, "The E-Ticket Life" is now available on Amazon. In addition to his weekly "Money at 30" column on Dyer News, he is also the editorial director and a writer for the Disney fan site LaughingPlace.com and has recently starting publsihing his own personal finance blog at https://moneyat30.com/

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Comments

Advertises that customers get Cash Back Rewards for shopping at businesses with a higher Aspiration Impact Measurement (AIM) score. But you have to give a company money first before you can find out how good/bad a merchant is (posted transaction in app and online reveals score but it’s not available elsewhere).

Rewards are not explained in the Disclosures as required by the FTC, but instead are buried in their FAQ’s where they explain they have the right to change them without notice. Using the Internet Archive, I see now that on 05/12/2019 they were offering 1% Cash Back for businesses with a HIGH AIM and 0.5% for all others. Ten days later on 05/22/19, they changed that to 0.5% for business with the HIGHEST AIM and 0.25% for all others and for the first time revealed the list of (only 23) businesses with extra rewards:
Adobe Systems CVS Page Plus Cellular
Aetna DirecTV Skype
Allstate eBay Sprint
Apple Esurance Target
AT&T Google Verizon
Boost Mobile Jet.com Walmart
Boots MetLife Xbox
Cricket Wireless Microsoft
My concerns were repeatedly being dismissed by a representative “Nicole W” who at first said she too wanted more clarity on the rewards and then said if I don’t understand their [vaguely written] legal Terms I should seek legal counsel. She claimed that my request for transparency would require engineers that they couldn’t justify for a “one-off” request. However, it doesn’t take an engineer to put the score next to the above list or with the list of the THOUSANDS of businesses they advertise they have scores for (website shows Amazon, Netflix, Tesla, Nike, Urban Outfitters, Hyatt, Whole Foods, YouTube, Starbucks) so you have to first do harm by supporting a bad company and then learn from your mistake. Furthermore, “highest AIM” seems subjective as CVS has a 93/100 People Score and 91/100 Planet Score, but Walgreen’s has scores of 88/100 and 91/100 and does not earn extra rewards. They’ve got AIM scores on THOUSANDS of businesses but only 23 are the “highest”(?!!) Assuming their use of “thousands” only means 2000, Aspiration is not rewarding you for shopping at 98.85% of known businesses; 3000 businesses equates to only 0.77% eligible for incentive… (For past 15 years, Global 100 reviews 3.7 million data points to rank 7500 companies and only 1 of their top 100 is in Aspiration’s 23: MetLife at #53) “Rewards” for shopping at any known business, except the 23, are same as for businesses Aspiration doesn’t know. Again, no where can you find the score until you’ve already spent money and no where can you see why the score was given or what is considered the “highest AIM” (as required by the FTC). Chief Compliance Officer, Christopher Mates, was contacted about concerns regarding Rewards transparency and provided copy of FTC’s Disclosure requirements (read receipt received) and response from Aspiration’s rep was that consumer transparency is a feature not a requirement.

Both app and website report purchases with Transaction Date (not Posting Date) so when using third-party financial apps or software, it makes it difficult to reconcile transactions which will have a tip added later. For example if you use You Need A Budget (YNAB) and purchase a $5 cup of coffee every day from Starbucks but tip different amounts, the original authorized amount immediately is imported as $5 on Transaction Date but is sometimes duplicated with the final amount Posted with tip. Original authorized transaction amount imports as “cleared” only to later be changed or duplicated with final amount with tip.
Transactions cannot be exported or downloaded (which would ordinarily show you both the Transaction and Posting Dates) until a statement is generated and then, despite their WebConnect with YNAB and Quickbooks Online (set up by Aspiration NOT by YNAB or QBO), are only available as a PDF. No option for a Quickbooks Desktop file either. Support request for fix during a 1.5hour call 10 days ago provided not even an acknowledgement email.

As an accountant, after reading all the complaints regarding service issues, after personally receiving condescending responses for legitimate concerns, earning $1 for every $400 spent (until they change/lower reward again without notice), doesn’t seem worth doing business with Aspiration. You’re better off downloading the full Global 100 list and supporting those businesses with a different card that has higher/clearer rewards like “Discover It” which gives 1-2% back on any purchase.

I appreciate you sharing the info, Douglas! I hadn’t realized the changes to the cash back debit but have updated accordingly. I definitely agree that it’s strange how they went about that and the issues with their statement exports.

Thanks again!

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