Money at 30: One Finance Review
Having reviewed several digital banking account options over the past few years, it’s safe to say that most have pretty much the same few features to offer with only a couple of different twists. While the interest rate or debit card designs may differ, there usually isn’t a whole lot new under the Sun, as they say. That’s why I was intrigued when I came across One Finance, which seems to have some unique ideas for what an online banking service should be.
So what does One Finance bring to the table? Let’s take a look at both the basic and unique features that make up the account and whether or not they make it worth signing up for yourself.
What is One Finance and What Makes it Different?
Joining One Finance
The first thing you’ll need to do in order to get started with One Finance is to provide your phone number. To ensure you’ve entered the correct number, the app will send you a code that you’ll need to verify to continue. From there, you’ll need to enter other personal information such as your legal name, your email, your Social Security number, and your shipping address. You may also need to verify your identity by uploading a photo of your license.
Also of note, funds deposited into your One account are FDIC insured up to $250,000 per depositor thanks to One’s partnership with Coastal Community Bank.
In order to get started with One, you’ll want to transfer funds from an external source. To make this process simple, the app utilizes the Visa-owned API Plaid. With Plaid, you can select your current bank, log into your account, and transfer funds as needed.
I should note that, currently, One is offering a $20 bonus to new users who fund their accounts with at least $100.
Once you’ve connected an external account, you can continue to set-up subsequent transfers by visiting the Move Money tab in the app. What’s also nice is that you can link multiple accounts at one time. That way, you can choose where you want to transfer money to or from as needed. The only nitpick I have is that these accounts display by the last four digits of the account and not by the bank name (with no apparent option to edit them).
In terms of transfer times, they are about standard for digital banking options. This is to say that they are not instant and can take a few days to clear. Still, I haven’t had issues moving funds between accounts other than the slight wait.
Obtaining and using your One debit card
Within seven to 10 business days of opening your One account, your debit card should arrive in your mailbox. Even better, after you activate it, you can currently earn a $5 bonus when you make your first purchase with the card. It can also be added to digital wallets such as Apple Pay for even easier access.
Spend and credit available
At first glance, the Spend Pocket that comes standard with your One account might seem like your everyday checking feature. While it does serve as that, it has an added bonus that could come in handy in a pinch. As part of your Spend account, you can get a small credit line that will allow you to overdraft your account for a short period of time if needed. What’s more, as long as you bring your account back to positive by the end of the calendar month, you won’t have to pay any interest. Meanwhile, if you do carry that negative balance into the new month, you’ll be charged 1% interest per month (12% APR).
Before this Credit Limit will be available, you’ll need to activate it — which won’t impact your credit score as One does not perform a hard inquiry. Then, it will only kick-in once your Spend balance reaches less than $0.
Your Credit Limit will depend on whether or not you’re receiving direct deposits. Without direct deposit your limit is likely to be quite small. For instance, mine is currently $20. Whatever your limit is, it will display alongside your Cash balance when viewing your Spend widget on the Pockets tab.
Personally, while I don’t intend on using this feature, I’m glad it exists. At the same time, I do wonder why the decision to tie the due date to the calendar month was made as it may make it harder for some users to avoid interest. If possible, I think it’d be better if it moved to a flat 30-days from the time of the overdraft, but at least this current system offers something.
Save, Auto-Save, and earning interest
The other main Pocket is the aptly-named Save. What makes this Pocket powerful is that funds you keep in it will earn 1% APY (on balances up to $10,000). This interest is accrued throughout the month and paid on the first of the new month.
While 1% APY is already pretty strong in today’s market, One also offers the opportunity to earn an even more impressive 3% APY. This is achieved with the Auto-Save sub-Pocket. Notably, this requires you to directly deposit your paychecks in One and (as the name if the feature implies) auto-save a percentage of said paycheck. Currently you can auto-save between 1% and 10% of each check, with those funds then yielding the 3% APY.
Creating new Pockets
Beyond the standard Spend and Save Pockets, One also allows you to create additional Pockets. These will essentially function as mini sub-accounts, allowing you to earmark funds for certain purposes. Unfortunately, these Pockets will not earn APY — although I do hope One will introduce a way to add custom Save Pockets in the future.
To create a new Pocket, just tap “Add” next to the “Create and share Pockets” option. You can choose from a number of suggested Pocket names or enter your own. Once added, you’ll see your Pocket listed along with any others below your Spend and Save ones. You’ll also see the current balance of each, with the overall balance across all of your Pockets displaying as “Total Cash” at the top of the app.
What’s really interesting is that each Pocket you create will actually have its own account number. That way, if you want to auto-pay bills or set up recurring deposits via other apps, you can ensure that you’re using the desired Pocket. Similarly, you can assign your debit card to different Pockets on the fly… which we’ll look at more in just a moment.
Not only can you use custom Pockets to divvy up your own bills but can also grant friends and family access to Pockets you’ve created. By tapping into a Pocket and then hitting the + button, you can invite others to join your shared Pocket. This is accomplished by sending them a link either by text, email, or other such options. If the person you’ve invited does not yet have a One account, they’ll have access to the shared Pocket as soon as they join.
It probably goes without saying but, by adding someone to a Pocket, they’ll be able to contribute money to as well as spend money from that shared Pocket. Therefore, I’d advise that you only select people you trust to join. Of course, should you wish to remove someone from a shared Pocket, you can do so in the Pocket’s settings.
Assigning Pockets to your debit card
Another interesting aspect of Pockets is that you use the app to select what pot you want your purchases to come out of. For example, if you’re booking a flight or hotel stay, you might temporarily assign your One debit card to the Pocket you created as a travel fund. To me, this concept is actually akin to what Qube Money is building — albeit with less of a direct emphasis on budgeting.
To reassign your debit card to a certain Pocket, just tab the card icon in the top right corner of the app (or under the My Card section in the Details tab). Then, you can select the proper Pocket. Once you’ve made your choice, the name of the assigned Pocket will display next to this icon so that you can quickly tell which is linked.
I should mention that, in keeping with the intention of the Save feature, it is the only Pocket that cannot be assigned to your debit card. Instead, you’ll need to transfer funds to a different Pocket first and then assign that.
Other One Finance Features
Further down on the Pockets tab, you’ll find a list of your recent transactions. One nice touch I noticed is that some transactions will display the logos from the businesses you shopped at (such as Starbucks in my case). While there is no other dedicated Transactions tab in One currently, you can also view purchases by tapping on the appropriate Pocket.
In the Move Money tab, one of the other options you’ll find is Deposit checks. However, currently, selecting this feature will launch a pop up informing you that this capability is coming soon. In the meantime, they recommend depositing your paper checks into an external account that supports such functionality and then transfer the funds to One.
As someone who does still use the mobile check deposit feature from time to time, I’m glad to see it’s at least on One’s radar and look forward to trying it out once it arrives — I just hope they built out a solution themselves instead of relying on Ingo Money like Sesame Cash does.
Yet another option listed on the Move Money tab is “Pay anyone.” Although I was expecting this feature to be a proprietary peer to peer payment service, it’s actually for more traditional bank transfers. This means that you’ll need to provide the recipient’s routing and account numbers in addition to their name and phone number. While I’m sure there’s a use for this, I suspect most users will find it easier to simply link their One account to a third party service such as Venmo or Square Cash. Alternatively, in theory, you could also create a shared Pocket (assuming the recipient was a One user), allowing the payee to move the money from there.
Lastly, right now One if offering a sizeable referral bonus to new and existing customers. Those who join One using a referral link can earn $20 when they fund their account with at least $100. Meanwhile, the person who referred them will also score $20 (up to a max of $100). You can find you referral link by tapping the “Invited friend” button in the Details tab of the app and track your invitations from there — and if you’re looking to get started with One, you can always using this link to sign-up in order to earn your $20 bonus.
Final Thoughts on One Financial
Looking at One Finance’s main tab makes it seems deceptively simple. In reality, there are several features that make this more than another FinTech savings and checking account. Between the unique implementation of the Pockets feature, the impressive APY (with the opportunity to take it even higher), the credit cushion, and even the generous bonuses currently offered, there’s a lot to like about One. In fact, my only real concern is that it’s too good to last. As I’ve experienced in the past, sometimes new offerings of this nature start off really strong but then need to cut back perks or start charging in order to properly monetize.
That said, it’s really unfair to judge One on what the future may hold. Thus, looking at the current product, I only have a few small suggestions. For one, I do wish there was a way to create additional Pockets that earned interest. This could be great as it would allow users to save for specific goals instead of having all of their savings in one main account. On a somewhat similar note, considering that One has already built-out the Pockets infrastructure, it seems only logical to me that they’d add more budgeting features. Personally, I think it would be cool if you could assign spending limits to different Pockets or at least have a tab where you can view your transactions by spending category (and have a way to override categories, which does not currently seem possible).
Aside from those suggestions, I have to say I was really impressed by One Finance and hope that this digital banking option only gets better from here.
Also published on Medium.