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I recently heard about Aspiration Summit through Facebook. It's a checking account offering 1.00% APY, no maintenance fees, no fees at certain ATMs, and reimbursements for the fees at all other ATMs.

My question is, what's the catch? This definitely sounds too good to be true, but I haven't been able to find anything that resembles a catch anywhere on their website.

  • 1
    My Ally savings account is at 1% last time I checked. Keep most of your cash in a high-yield savings account. Your checking account is then just for making payments and withdrawals, so you should choose your checking account on the basis of the features that come with it (debit card, online bill pay, etc.), rather than yield. I use Simple for checking because it's really nice to use. I imagine this bank is legitimate, but I don't see what the benefit is for you. – dimo414 Nov 14 '15 at 15:22
  • They have no joint accounts available as of March 2016. Count me out. And no savings, just investment accts. – user40026 Mar 17 '16 at 3:46
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I hadn't heard of it, but it looks legitimate to me. In the fine print on the product description page, it mentions that the account is backed by Radius Bank, which is a real FDIC member (so it's at least not transparently a scam).

One caveat to note in the fine print on the product page you link to is that the 1.00% APY applies only to balances over $2500, but it does apply to the whole balance in that case, not just the excess amount. For lower-value accounts, the APY is 0.25%. For comparison, I'm currently getting 0.75% in my Capital One 360 savings account and 0.20% in checking. The US dollar 1-month LIBOR* is 0.19700%, and 1-year is 0.93260%, as of 2015-11-13. So the rates are very good but not ridiculous: in my humble assessment, they're probably not making much profit on them, but they're not taking much of a loss, either.

The structure of the outright fees seems in line with what the good deals from other banks often look like.

The above assessment (interest rates are priced roughly "at cost") seems consistent with their philosophy as described on their website. See, for example, "How Does Aspiration Make Money" in their FAQ:

We work for tips. The only money we make is what you decide to pay us. We let you choose an amount from $0 to $6 a month when you first sign up for an account and you can change it any time. You get charged on a monthly basis at whatever level you’ve chosen on the last day of the month. We’ve designed it so that you’re under no legal obligation to pay us. However, having worked hard to create and operate the Aspiration Summit Account for you, we hope we can count on you!

Fair enough, but be careful about how generous you get with the tips! Six dollars a month on a $2500 balance is 6 / 2500 * 12 = 2.88% per year, a significant fee in bank-world.

So, in conclusion:

  • Be aware that the 1% APY applies only if you keep a balance over $2500.
  • The interest rates and fees are a good deal, but not so far out of line with the market so as to arouse suspicion.
  • They appear to run their main operation "at cost," and earn their profit on a "pay what you think is fair" model.
  • Be aware that the tips can be deceptively high.

*LIBOR is the London interbank offered rate, a measure of what interest big banks charge each other. "1-month" and "1-year" refer to the interest rates for loans the banks will pay back in one month and one year, respectively.

  • Very good point re how easily tips could swamp income... – keshlam Nov 14 '15 at 3:05
  • If nobody tips them they would still be making money from working with people's balances just like a normal bank, right? – Mehrdad May 11 '16 at 4:37
  • The bank is making more than 1% of every purchase you make with the card. – AbraCadaver May 11 '16 at 19:58
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The accepted answer is already good, but I just wanted to point something out:

The ***"no monthly service fees"***] part seems to be at least a half-lie, if not a complete one.

There is a Dormant Service Charge of $5/month (that's $60/year!) for accounts that have been inactive for 12 consecutive months, which seems to have gone unnoticed across the web.

protected by Community Mar 18 '16 at 19:54

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