This is the review of the Aspiration Checking account that yields 1.00% APY per year with no fees and no ATM fees for ANY atm. The Aspiration bank itself is reviewed and the mutual funds they offer are pay what you want model. Where the fees they charge is based on what you want to pay from 0 to 2%. 10% of the profits they generate goes to a charity called Accion which is a microloan to small businesses. Now, a microloan is paid back so I’m not too sure how this is considered a charity because the amount paid back includes the principal plus interest.
Probably going everybody does is beat the bush today i’m going to talk about the aspiration checking account and the bank in general some of you have asked me about this thinkin and generally gives you a 1% apy on a checking account so this is pretty good for any given bank and there’s a lot of them i classify them into three different kinds the first time is just a
Regular bank really low interest rate and then you got the really high interest rate online banks those are usually the big name ones and then you have these smaller ones which offers a really high interest rate something like three to five percent eighty why generally to get the three to five percent ap why they make you jump through a lot of hoops such as maybe
Like 30 debit transactions per month now this aspiration bank comes in a totally different category because they ask you to pay what you want it sounds strange at first because for any kind of service or product that asks you to pay what you want i just take a step back and go wait a minute this is really weird and it’s a model that sometimes work depending on how
They set it up aspiration bank is obviously not a really huge bank but i don’t really know how much revenue they generate each year so i look at their address and this is their office building over here i can see from google maps that this building is not all theirs it’s maybe one or more floors that belongs to this company anyway back to the checking account they
Offer 1% apy if you have twenty five hundred dollars or less than this checking account you only get 0.25 percent apy this is really good compared to normal checking accounts because normal ones you don’t get any interest at all for the money that you put in your checking account it says it has fdic insured there’s no monthly fees and no atm fees from any atm if
You would draw from one other atms that’s not theirs the atm would actually charge you fees and then the bank would also charge you fees it says on their webpage that if the atm charges you fees they will actually reimburse you at the end of the month i’m not too familiar with this because i didn’t actually use the service but i would actually try to use it at
Various atms to really make sure that they would reimburse you first maybe if i use some random one in an international country they say they would reimburse you but i personally like to see it happen before i go around using all the atms and any atm i want now this bank also has two mutual funds one called re vwx which has 15 million in total assets and also has
A different one a sp fx which has 7.3 five million in total assets if you look at bigger funds they generally have a lot more than that because as a bank there’s a lot of people putting money into it and when you have multiple people putting money into it 15 million is not all that much now because they have their own mutual funds they have more credibility so
I kind of tend to think that they do have this fdic insured thing but generally for any new bank before i want to put like thousands of dollars into their bank i really want to vet them first and make sure there are a legitimate bank and this generally takes me a really long time that’s why whenever someone asks me oh or do you think about this bank i don’t have
The one hour or more time that requires me to really vet the bank just do research on them just to see that they’ve been around for a while and they’re a legitimate business and that they won’t take my money and run away because it almost seems like you can start a bank and call yourself fdic and sure you can just be some little shady thing that you don’t really
Advertise and then you would collect people’s money and then run away with it kind of like a con sham or something so i’m worried about that for any new bank that i’ve never heard the name of so if you look at the video on this front page you would see the plane flying over and there’s this voice over and this guy would talk about the fortunate few maybe like the
Really rich people are hoarding the best investments now this phrase itself is kind of strange to me because best investments how is an investment really good is it based on the fact that maybe it makes a better return than an etf in the s&p 500 by definition it is really hard for a mutual fund outperform an etf index fund just because they charge that fee when
When they charge somewhere between 0.5% to 2% fee it compounds over time the fees compound also at the end of maybe 10 20 30 years you’re going to see a drastic difference because you’re paying all this amount of fees so the fact that they’re selling mutual funds kind of you take a step back because mutual funds earn the fund managers a lot of money however there
Is a twist to this because you actually do not have to pay any fees they set it up so that you can choose what you want to pay and there’s this little slider thing that you can allow to pay 0 to 2% of your total investment portfolio and you’re allowed to choose 0% if you want to so if you’re smart you’re going to pick 0% but the ethics of this is going to eat away
At you because you’re receiving these funds these actively managed funds and you’re not paying anything and they urge you to pay what you think they deserve now the bank is not public so i cannot figure out what the percentage the customers are paying based on their income statements but i can do a little bit of research on behavioural studies on the way they set
This up so you’re allowed to pay a fee of anywhere from zero to two percent and their whole slogan is do well and do good model so this is like a bank that says we’re good people you should pay what you want they contribute 10% of their revenue to charity neither this 10% to charity i wonder what exact charity they’re picking i looked it up in their faq sheet it
Says ac on micro loans acc io and micro loans so when i look up micro loans for this company is actually up to $5,000 for individual small businesses now a micro loan is not an actual donation to me because when you are donating to charity you have you know your $100 and you give it to them and you no longer lay claim to this money however a micro loan you give them
The $100 but yet they still owe you money so at the end of this micro loan if they collect the interest on top of that they’re actually going to get more than this 10% they’re donating to charity so what i see is happening is they’re giving $100 out they wait some years and it gets paid back to them with interest maybe they get $110 so why is this a donation to me
This is not a donation so finally i like you guys to think about this pay what you want method i looked it up and there’s this nice study g and ezy where they had abused in park and people can come and pay what they want for pictures taken so the average price that people pay for a picture if they’re allowed to pay whatever they want is 92 cents for that picture
Now this pay what you want thing is relevant to this bank because they’re asking you to pay what you want for this investment vehicle these mutual funds that they’re selling the interesting part is a couple it with a donation of 50 percent when they say 50 percent of the profits it’s going to go to donation then suddenly things change a lot the average price paid
Changes to six dollars and fifty cents instead so based on this study if you couple pay what you want and a donation to a charity then it actually makes people want to pay more you may look at it and go all fifty percent to charity oh i want to donate maybe three dollars a charity so i’m going to pay them six dollars same thing happens here with the investment
Because people feel like oh they’re doing good so 10% goes to charity so maybe they are incentivized to pay more in terms of fees hence for this bank i really like to know what the average percentage fee that they actually receive from all their customers if i were to put a ballpark number on it it would definitely be more than 0.3% which is kind of about what you
Would pay for an ets fund i would almost guess it’s going to be about 1.3 percent just you know just random guess like i said i didn’t use this checking account myself but you can go in ahead and go in there and try to get your 1% if you deposit more than $2,500 in and i’m not sure if they’re going to ask you for a percentage fee even if you only have a checking
Account but most likely they’re going to want you to do investments as well so there you have it seems like i review a lot of financial products these days and maybe through my eyes i’m looking at it i see things that other people aren’t seeing and hopefully this helps you guys out don’t forget to give me a like on this video comment down below let me know if you
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Transcribed from video
Aspiration Checking with 1.00% APY | BeatTheBush By BeatTheBush
