Tally Introducing Free Automated Savings Service
Something that often gets lost in all the talk and controversy surrounding FinTech is that many of the companies wearing that label aim to improve the financial lives of their users, not hurt them. From making investing more accessible to giving consumers more effective tools for getting out of debt, there are numerous apps that provide a real service to their users. One popular method employed by many of these services is automation, which also happens to be the star of an upcoming expansion from four-year-old startup Tally.
As Fortune reports, Tally is now preparing to launch a new automated savings service. Just as it sounds, this app will allow users to arrange automated transfers from checking to a savings account on a weekly basis. While this isn’t exactly a new concept, Tally boasts that the feature will work with any bank or credit union in the United States. Plus, unlike some of its competitors, Tally’s new product will also be free to use.
To be sure, even outside of those paid services, there are other free apps that provide automated savings. Among them is Clarity Money, which was actually purchased by Goldman Sachs last year. One of the results from that acquisition was that Clarity users can now elect to upgrade their automated savings accounts to Marcus by Goldman Sachs accounts and currently earn a 2.25% APY on their money. Meanwhile Tally says their service won’t pay interest, although funds will be FDIC insured thanks to their bank partners.
Incidentally part of the decision not to offer interest on their new product is that, according to Tally co-founder and CEO Jason Brown, the startup expects to lose money on this venture. Brown told Fortune, “It’s actually reasonably expensive to provide this service to people.” However he added, “Because we have a strong revenue model it allows us to give away some of the automation for free.” He went on to say that Tally will lose some money with each customer that joins their new app, while assuring that the bill wasn’t large enough that they’d need to start charging for the service in the future.
Looking beyond the upcoming savings product — interested individuals can join the waitlist at MeetTally.com — Brown shared a vision of automating other aspects of personal finance. He said the ultimate goal would be “completely outsourcing financial decision-making and work.” Brown went on to assert, “We’re now in a sprint to full financial automation.”
Candidly, as a frequent observer of the FinTech sector, the description of Tally’s automated savings plan on paper doesn’t seem all that innovative (their billing of the product as “the only free automated savings service” is also questionable). That said the idea of bringing greater automation to finance as a way to help consumers manage their money is definitely intriguing. Perhaps there’s more to Tally’s upcoming app than meets the eye and, more importantly, will lead to much more down the road.