Aspiration Banking Review — Are Recent Changes for the Better?

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Aspiration Banking Review — Are Recent Changes for the Better?

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.

In the short amount of time since I’ve had an account, several things have changed with Aspiration. While an earlier round of updates was for the better, more recent ones have not been. So 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 banking services.

Editor’s note: this article was updated in September 2019 with the latest APY information.

What is Aspiration?

Aspiration is an online banking services company 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 DiCaprio 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.

A brief history of Aspiration and its many changes

First, 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 would need 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.

Unfortunately, this structure changed again in August 2019. Following the Federal Reserve’s rate cut, Aspiration announced that it would still offer 2% APY… but only to customers who deposited at least $1,000 a month — a far higher threshold than the previous $1. Alternatively, if you have a balance of over $10,000 for at least one day during a given month, you’ll earn 1.5% APY. Sadly, failing to meet either of these requirements will result in 0% APY for the month.

Then, in September 2019 (following another Fed rate cut), Aspiration lowered their APY back to 1% while retaining the new restrictions. We’ll talk more about my feelings on these changes a bit later.

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 0.1% 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 September 19, 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

The good news is that, on top of that, Aspiration is also offering up to 5% cash back when you use your debit card to make purchases from members of the Conscience Coalition. Here’s a look at those participants (accurate as of September 19, 2019):

  • 5% cash back:
    • Reformation
    • Warby Parker
    • United By Blue
    • Parachute Home
    • Brandless
    • Causebox
    • LOLA
  • 4% cash back:
    • TOMS
    • Known Supply
    • Soapbox
  • 3% cash back:
    • Arcadia Power
    • Feed Projects
    • This Bar Saves Lives
    • Wag Walking
    • Blue Apron
    • Girlfriend Collective

Even as someone who doesn’t plan on really using this feature, the initial change was pretty disappointing. While I was 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 (and later down to 0.1% for most) makes this feature even less viable. However the addition of the Conscience Coalition bonuses is additedly pretty cool even if the list is fairly short.

Ultimately if simple, straight-forward 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 the 0.1% back you’ll get on most Aspiration debit card purchases.

High-ish APYs (if you meet the requirements)

As mentioned earlier, Aspiration does offer up 1% APY on savings but has made earning that amount much harder than it used to be. Nevertheless, if you are using the service as your main account, it is quite possible that you’ll be depositing at least $1,000 a month and getting that high APY.

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 — up to five reimbursements per month.

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. That said, I should note that the five reimbursements per month limit is another recent change (the perk was previously unlimited) that came in August 2019.

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.

High threshold for APY

While the APY potential of Aspiration is a good thing, what you need to do to earn it is now a major negative. To be honest, my plan was never to use Aspiration as one of my main accounts, thus a $1,000 a month deposit is just not something I’m going to do. Similarly, I don’t see holding $10,000 with them. Thus, the latest changes have knocked my APY from 2% to 0% — and I suspect the same is true for many others.

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.

Less than stellar account statements

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 didn’t display all of the balance data that other banks would. Thankfully, this has since been corrected and a running tally now shows under your transaction both on mobile and on desktop.

At the same time, Aspiration’s account statements still leave something to be desired. To me, they’re oddly confusing and not really what I’m used to from banks. So while I’m thrilled that they finally fixed the balances issue, I hope statements also get a second look in the future.

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 exist. 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 in recent years. In addition to their unique business model and humanitarian efforts, they also offer a number of banking features that can help customers save money. At the same time, based on the recent changes to their accounts, I can no longer whole-heartedly recommend them for your banking needs.

Although the 1% APY and the ability to use any ATM in the world for free was what brought me to Aspiration, the new limits on earning interest coupled with the capping of ATM reimbursements has certainly soured me. On top of that, while I’m glad their app and site now allow you to view running balance totals with transactions, there are still other aspects of their banking experience I find lacking — and for that they still request a monthly fee. For those reasons, I’d say it’s only worth setting your sights on Aspiration if their overall message is enough for you to overlook these downsides. If not, I’d try SoFi Money or Discover Bank instead.

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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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