- Aspiration, an online bank founded on the idea that customers should pay what they think is fair, is rolling out a new banking service where consumers can gain additional rewards for shopping at companies who carry out sustainable business practice.
- The new product, akin to a high-yield checking account, offers 2% APY on deposits, and each account is insured by the FDIC up to $US250,000.
Aspiration, an online bank founded on the idea that customers should pay what they think is fair, is rolling out a new offering that will pay you to shop at do-good companies.
The new product, called the “Spend & Save Account” is akin to a high-yield checking account. It offers 2% APY on deposits, and each account is insured by the FDIC up to $US250,000, according to the company. On the surface, Aspiration’s offering appears similar to other recent products offered by fintechs like Wealthfront and M1 Finance.
However, the company promises that the deposits will be “100% fossil fuel free” and offers shoppers who use the Aspiration debit card extra rewards for shopping at businesses with strong environmental and employment practices. Users will also earn unlimited cash back on every dollar they spend.
Aspiration estimates it will save customers an average of $US545 a year.
“American spends $US36 billion a day as consumer, and that’s an enormously powerful lever to make a change,” said Aspiration’s CEO and co-founder Andrei Cherny. “And that’s part of why people come to Aspiration is to have more money in their pockets, but also have more power to do good in the world.”
How does Aspiration measure the company’s sustainability? It uses two measurements – a “people” score and a “planet” score. The people score tracks a company’s employment policy, while the planet score examines how environmentally friendly the company is. The score is calculated through Aspiration’s proprietary algorithm, which examines over 75,000 data points. Target and Apple are among those companies with high AIM scores, according to the company’s website.
The account replaces the previous “Aspiration Summit Account,” a cash account offered through Aspiration’s former partnership with Boston-based bank Radius Bank. Aspiration became a SEC-registered broker dealer last year, so the company is ending its dependence on a third-party bank account structure.
Based in Marina del Rey, California, Aspiration has raised over $US100 million from investors including Social Impact Finance, Allen and Company, Omidyar Network, Alpha Edison, AGO Partners, Reyl & Cie, and Capricorn Investments. Other big-name investors include award-winning actor Orlando Bloom, Los Angeles Clippers coach “Doc” Rivers and former eBay CEO Jeff Skoll.
The firm has attracted nearly a million customers and adds over 100,000 new clients a month. Nearly two-thirds of Aspiration’s customers are under 35, and most of them are spread across the country. Only 6% of of customers live in the New York City, Los Angeles, and San Francisco Bay area combined.