Aspiration Review – Banking and Investing On One Platform
Aspiration is a unique service in the financial services universe. They offer high interest banking and investment products on the same platform.
- Environmentally sustainable investing
- Unlimited cash back on debit purchases
- No transaction limit on savings
Aspiration is based in Marina del Rey, California, and was founded in 2014. It’s something of a combination between an online bank and a robo-advisor, though they describe themselves as more of a community. They provide a mix of non-traditional bank products, as well as investment funds, enabling users to both bank and invest on the same platform.
But there are couple of twists with Aspiration that make it unique when compared to other online banks or typical robo-advisors. For starters, investments held through Aspiration are made in environmentally sustainable ways. For example, no money held with Aspiration is ever invested in anything connected to fossil fuels.
Aspiration also allows you to decide how much you want to pay in investment fees. In this way, they put their customers ahead of bottom line profits.
They also allow you to contribute up to 10% of your fees toward one or more of seven different charitable causes. In this way, Aspiration enables you to both invest your money and do it in ways that will be consistent with your own personal beliefs.
Banking with Aspiration
Aspiration offers two main bank products:
Aspiration Spend Cash Management Account
Though the Spend account is a cash management account, and not a checking account in the strict sense, it offers many of the same features.
Both the Spend and Save accounts currently pay 1.00% APY. To qualify for that rate under either account, you must do one of the following:
- Make at least one deposit of at least $1 into either account, or into one of the two Aspiration investment accounts, OR
- Have an end of the day Save balance of $10,000 or more for at least one day per month.
The Spend account comes with a Debit Mastercard. And unlike a lot of online bank checking accounts, paper checks are available for a Spend & Save account.
You can earn cash back on all debit card purchases. The rate is either 0.5% or 1%, depending on the merchants Aspiration Impact Measurement (AIM). You’ll earn 1% when the merchant rating is high, and 0.5% on businesses that either have low scores or have not yet been scored. There is no limit on how much cash back you can earn. Cash back earnings are posted to your Spend account on the first business day of each month
Aspiration does not have an ATM network. But ATM fees paid to other banking institutions will be reimbursed. Reimbursement for foreign ATM usage will be a flat $4, but will not include third-party currency conversion or transaction fees.
The Save account also pays 1.00% APY based on the same criteria required for the Spend account.
One of the major advantages of the Save account is that it’s not subject to the six monthly transactions limit that applies to savings accounts and money markets, under federal Regulation D. The account permits as many transfers in or out of the account as you like. However, Aspiration does impose a limit of one transfer to or from an external bank account per day.
One of the limitations of the Save account is that you cannot deposit checks directly into the account. Instead, you’ll have to deposit them into your Spend account, then transfer the funds to the Save account.
Aspiration Investment Funds
So that you can invest and bank on the same platform, Aspiration offers two investment funds, each with an orientation toward the environment and sustainability. Each fund requires a minimum investment of just $10. The fee structure works the same as it does for the Spend and Save accounts. You choose a fee you feel is fair, then 10% of the fees paid will be donated to one or more of the seven Aspiration charities.
The Redwood Fund (REDWX) provides fossil fuel free investing in companies with sustainable environmental and employee practices. But at the same time, it also focuses on companies that are poised for growth.
The Fund invests in all the industry sectors you would expect from a well-diversified portfolio, including information technology, financial companies, consumer goods, healthcare, industrial companies, communications services, and other industries. But in each industry, they select companies that maintain best environmental and employee practices.
The Fund has no fees. That includes front and back load fees, per transaction fees, performance fees, and redemption fees. Meanwhile, net operating expenses within the fund are limited to no more than 0.5% of your investment.
Historical investment returns are as follows:
The Flagship Fund (ASPFX) is a low volatility fund, that aims for long-term growth with less volatility than the overall stock market. It’s actually a fund of funds, since it’s comprised of other funds. Those funds include both mutual funds and exchange traded funds.
Similar to the Redwood Fund, there are no other fees associated with the fund, but there are operating expenses within the fund, that are also limited to 0.5% of the account value each year.
Either of the Redwood Fund or the Flagship Fund can be used for an IRA. Each requires a minimum investment of $10. However, the IRA option is strictly for traditional IRAs, and not Roth IRAs. Roth IRAs may be added in the future, but no timetable is provided.
Making deposits. You can add funds to your account in any of the following ways:
- Electronic transfers (ACH)
- Wire transfers
- Third-party transfer apps, like PayPal and Venmo
- Mobile check deposits (applies on the Spend account only)
Making withdrawals. You can access funds to your account in any of the following ways:
- Electronic transfers (ACH)
- Wire transfers
- Third-party transfer apps, like PayPal and Venmo
- ATMs (applies on the Spend account only)
ATM network. Aspiration does not have its own ATM network, nor do they participate with any national networks. However, you can use your ATM card at any other bank’s ATM machine, and you will be reimbursed for those fees.
Daily account limits. When you first open your account, you’ll be subject to lower daily limits for the first seven calendar days, then higher limits for the remaining 23 days. Once your account has been opened for at least 30 days, daily limits are as follows:
- For outgoing transfers, $5,000
- For incoming transfers, $1,000
- ATM withdrawal limit, $1,000
- Total PIN & Signature-based limit, $4,000
Cell Phone protection coverage. Aspiration offers protection for your cell phone device of up to $600 per claim, and a maximum of $1,000 in every 12 month period. There is no additional cost for this protection. The coverage is in excess of any other applicable insurance or indemnity you currently have on your phone. It covers your device for damage or theft.
Customer support. Customer service is available by phone, Monday through Friday, from 7:00 am to 5:00 pm Pacific Time.
Aspiration Mobile App
The app provides all the features of the online version. It’s available for download on Google Play for Android devices 5.0 and up, and at the App Store for iOS devices, 11 or later, including iPhone, iPad and iPod touch.
Checks can be deposited by mobile deposit, with funds available one or two business days after deposit. Apple Pay and Android Pay are built into the mobile app.
“Payments” is Aspiration’s proprietary tool for sending money to either pay your bills or to pay a friend. In each case, the recipient will be mailed a paper check. The service is free, and there’s no limit on the number of payments you can send. The tool is available only on the Aspiration Mobile App.
Aspiration will donate 10% of the fees you pay on your account(s) to one or more of seven charities. Those charities include:
- Poverty: The Global Poverty Fund contributes money to children and families in developing countries.
- Water: The Water Fund drills water wells for communities in developing countries.
- Education: The Education Fund provides books, school fees, a backpack, textbooks, and a school uniform to children in underprivileged neighborhoods in America and around the world.
- Environment: The Environment Fund plants trees and provides environmental education.
- Health: The Health Fund delivers vaccines, medical supplies, and health education in poor areas. It also funds landmark research on diseases like cancer, diabetes, Alzheimer’s and AIDS.
- Human Rights: The Human Rights Fund works with charities in the battle against trafficking and torture, and advocates for the rights of women, immigrants, and people with disabilities.
- Aspiration Opportunity Fund: This fund provides micro-loans of up to $5,000, as well as mentorship and support to struggling Americans, who are looking to start a new small business.
Aspiration Spend and Save accounts are FDIC insured for up to $2 million per depositor.
Aspiration also employs the following measures to ensure the security of your account:
- Up to $1,000 in expense reimbursement if your identity is stolen.
- Multi-factor authentication, in which a security code is sent to your registered mobile device to access your account.
- Industry standard encryption to protect personal information when sent to or from the Aspiration website or app, and where information is stored.
- Fraud protection and alerts.
- Your Social Security number is encrypted, and your password is hashed.
- The network infrastructure enforces security with strict routing, firewalls and controlled access.
- Aspiration pledges to never sell or lease your information to anyone for any reason.
Aspiration has a basic fee structure that’s totally unusual in the financial services space. With both the Spend and Save accounts, you can choose a monthly fee you consider to be fair. That can be anywhere from 0% to 2% of your account value. The basic concept is that you pay what you believe the service is worth. And once again, 10% of those fees will be donated to charities.
Aspiration charges no fees on the following banking related expenses:
- ATM fees (international ATM fees will be reimbursed at a flat rate of $4 per transaction, though third-party currency conversion or transaction fees are not included)
- Overdraft fees
- Check deposit fees
- Debit card fees
- Inactive account fees
- Dormant account fees
- Stop payment fees
There are a few fees they do have, but most are well below what’s typically charged by banks:
- Canadian item collection, $5
- Deposited item reversal, $1.47
- Foreign item collection, $30 + foreign bank and shipping fees
- Returned item charge for checks or debit transactions, $1.15, or $5.33 for items over $5,000
- Domestic wire in or out, $0.82
- International wire in, $2.50
- International wire out, $15
How to Open an Account with Aspiration
You can open an account either online or by simply downloading the mobile app. To apply, you’ll need to provide some information:
- You must be a U.S. citizen or lawful permanent resident alien
- Must have a 10-year Green Card (work visas are not acceptable)
- You must be at least 18 years old
- You must provide your Social Security number
- You must provide your permanent address
- There must be a minimum of $10 to open a Spend & Save account
- You must have a checking or savings account from a U.S. bank or credit union to fund your Aspiration account
- You must have a valid form of ID, typically either a U.S.-issued driver’s license or state ID
Aspiration Pros and Cons
- Low minimum to open an account — Opening an account requires a minimum initial deposit of just $10.
- Banking and investing in one — Invest with the same online platform you bank with.
- Environmentally sustainable investing — Bank and invest in a way that’s environmentally sustainable, and consistent with your personal beliefs.
- Interest-earning accounts — Interest is paid on both the Spend and Save accounts.
- Unlimited cash back — On debit card transactions, of up to 1% per transaction.
- Cell phone protection — Up to $600 per claim for wireless cell phone protection, at no additional cost.
- Unlimited savings transactions — Aspiration Save is not subject to the six transactions per month limit that applies to bank savings accounts and money markets. Transfers in and out of your account are unlimited.
- No Roth IRA — Traditional IRAs are an investment option. Roth IRAs may be an option later but there isn't a date set for this.
- You must be a U.S. citizen or lawful permanent resident — Applicants with work visas are not acceptable.
- Limited product offerings — No loans or credit cards are offered.
- No cash deposits — Aspiration currently cannot accept cash deposits or foreign checks.
- No person-to-person money transfer via email or text — You can send "payments" to a friend but the payment will be sent in the form of a mailed check. Also, this feature is only available using the mobile app.
Aspiration is an excellent choice on all fronts. But they’re not without some stiff competition. It really depends on what your financial priorities are. Some alternatives that might better meet a specific need include the following:
Ally Bank is one of our favorite alternatives here at Dough Roller because it offers some of the highest paying deposit accounts in the industry as well as some of the most innovative car financing programs available anywhere. But in addition to banking, you can also invest through Ally Invest. You can either engage in self-directed investing–with no commissions for stocks, options, and exchange traded funds (ETFs)–or choose low-cost professional investment management through Ally Invest Managed Portfolios.
Discover Bank is best known for having some of the best credit card offers in the industry, including the award-winning Discover it series. But the bank also provides high interest deposit accounts, including high-yield CDs. They also offer a checking account debit card offering 1% cash back on purchases. Discover also offers attractive student loan refinance and personal loan programs
CIT Bank offers a large number of high-yield deposit accounts. But their star product is the CIT Bank Savings Builder account, currently paying 1.80% APY on balances of $25,000 or more. But just in case you don’t have $25,000, you can get the same interest rate by making regular monthly deposits of $100 or more.
Barclays Bank Online Savings account is currently paying 1.70% APY with no minimum balance requirement and no monthly fees. They also pay some of the highest rates available on CDs with terms of 12 months or longer.
Finally, Citi is one of the largest banks in the country, which makes it a natural choice if you run a business–especially one that deals internationally. The bank also offers some of the best credit cards in the industry, and enables you to invest where you bank through Citi Personal Wealth Management.
Should You Open an Account with Aspiration?
As you can see, Aspiration is a unique service in the financial services universe. They offer high interest banking and investment products on the same platform. But they also allow you to set your own monthly fees, while either eliminating or greatly reducing other fees typically charged by traditional banks.
You’ll earn unlimited cash back of up to 1% on debit card transactions, and 10% of the fees you do pay will be donated to worthy charities. You can also be secure in the knowledge that any money held at the bank will be invested in environmentally-friendly ventures.
And it’s all available with a minimum opening deposit of just $10.
If you’d like more information, or if you’d like to open an account, check out the Aspiration website.