Banking With Aspiration Bank: Pros and Cons

Kelly Hernandez
A couple speaking to a bank representative.

Aspiration Bank is an online bank that offers secure banking accounts you can access online or through a mobile app. Many consumers find mobile banking a convenient way to complete transactions and keep track of their financial situation. The bank also offers investment options that can help you get started with investment banking for your future.

If you’re looking for a bank that offers online-only features, is environmentally conscious, and can help you to develop a simple savings plan for your future, Aspiration Bank may be the right one for you.

Aspiration Bank is known for its focus on environmental and social charities, organizations, and causes. However, before you decide to open an account with this online bank, it’s important to understand more about the bank, the services offered, and the advantages and disadvantages of banking with this financial institution.

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Aspiration Bank Services

Aspiration Bank has no physical locations and you can only conduct banking services online. The bank offers a few bank account options that have specific goals in mind, such as saving for retirement or keeping track of spending. Before you decide which account is right for you, learn more about each account the bank offers to consumers.

Aspiration Spend and Save

The Aspiration Spend and Save account is a savings and checking hybrid account. When you open this account, there’s no minimum balance that you must keep to avoid penalty fees. It’s a great way to manage your expenses and payments because you can view your balance and transactions online or on your smartphone at any time.

The account includes five free ATM withdrawals each month and the balance you carry earns you 1% in interest. This generous interest rate is generally higher than most other major banks that offer checking accounts but is about the same as what most banks provide in interest for savings accounts. The bank allows you to set your own monthly fee based on what you can afford and think is fair.

Another feature of the Spend and Save account is that you may easily transfer funds between this account and other investment accounts you have with Aspiration Bank for free at any time. You receive a digital debit card when you open your account, as well as free cell phone protection insurance and identity fraud expense reimbursement.

Aspiration Investment

With the Aspiration Bank Investment account, also called the Redwood Fund, you can begin investing funds into environmentally conscious companies that don’t contribute to fossil fuel burning. The Aspiration Redwood Fund focuses on investments that will grow your money but are also socially and environmentally focused.

When you contribute funds to this account, they’re invested in companies in sectors such as health care, real estate, and informational technology. Your portfolio managers research and move your investments as needed to ensure your money is growing as quickly as possible.

To open an Aspiration Investment account, you must contribute a minimum initial $10 investment. You can easily transfer funds from your other Aspiration accounts or from outside accounts to continue growing the money you’re investing in the Redwood Fund. There are no transaction or performance fees but there is a third-party 0.5% fee on the funds you have in the account. You’re also asked to pay what you think is fair to the portfolio managers.

Aspiration Retirement

If you’re focused on developing a strong retirement plan that includes tax-free contributions, the Aspiration Retirement account may be right for you. It’s a traditional IRA account, also referred to as the Redwood IRA, that allows you to contribute money tax-free. Your funds are invested in the same socially and environmentally conscious companies supported by the Redwood Fund.

If you transfer your current IRA account from a different bank to Aspiration, the previous bank may charge you a transfer fee. However, Aspiration doesn’t charge any transfer fees. While you may incur annual operating expenses in your retirement account, the bank doesn’t charge administrative or annual fees. You must contribute a $10 minimum when opening the account.

Pros of Aspiration Bank

If you’re a fan of online banking, there are many advantages to opening an account with Aspiration Bank, including the following:

  • High interest rates on money management accounts: When you keep money in an Aspiration Spend and Save account, you earn 1%, which is higher than most other big bank checking account interest rates.
  • Social and environmental consciousness: Aspiration Bank only invests and supports companies that are environmentally and socially conscious so you know your money is helping important causes.
  • Minimal or no fees: If you open an investment or IRA account, you’re charged minimal fees and you’re asked to pay what you can in fees for your checking/savings account.
  • Unrestricted ATM card: When you open a Spend and Save account, you’re provided with an ATM card that’s linked directly to your account. You can use the card at any store that accepts this payment method.

Cons of Aspiration Bank

While there are many benefits to opening an Aspiration bank account, it’s important to understand some of the disadvantages associated with the bank, including the following:

  • Limited accessibility and communication options: With no physical branch and no online live chat, it can be tough to get your questions answered or to receive support quickly and efficiently.
  • No cash deposits: Aspiration Bank currently doesn’t accept ATM cash deposits into the Spend and Save account. You can only transfer money into your account electronically or through mobile deposit within the banking app.
  • Limited investments: Since the bank focuses only on specific environmentally friendly investments within the Redwood Fund, your range of investment options is limited.
  • No credit cards: Aspiration Bank doesn’t have credit card options and your Save and Spend account simply works like a savings and checking account.

Is Aspiration Bank Safe?

Aspiration bank is Federal Deposit Insurance Corporation (FDIC) insured. This insurance provides federal backing from the government which ensures all consumer assets are safe in the bank, even if it fails or closes.

Aspiration Bank is an online bank, so there aren’t any branches to visit in person. However, many customers are satisfied with the bank because of its dedication to the environment and social causes. If you’re happy doing your banking and investing online, you may find an Aspiration Bank account is right for you. Before signing up, review the different accounts available and choose the one that best fits your financial needs and goals.

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