Green Banking With Aspiration Bank (Review)

Aspiration is an innovative online bank that lets you make greener choices with your spending and saving. If you are looking for a socially responsible, fossil free bank, it should be one of your top choices.

SustainFi June 3, 2021

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Rating: Excellent (4.7 / 5)

Pros

  • Strong commitment to socially responsible banking
  • High-yielding Save account (1% APY for balances under $10,000)
  • Great app
  • A mutual fund that doesn’t invest in fossil fuels
  • Personal impact score based on your spending
  • Aspiration donates 10% of every $1 in fees
  • Planet Protection option: automatic offsetting of carbon emissions for each gallon of gas you purchase
  • Cash back on Conscience Coalition (includes TOMS, Warby Parker, and Blue Apron) purchases: 3-5% for basic accounts, up to 10% for Plus accounts
  • “Plant your change” opt-in program rounds up your spending to plant trees

Cons

  • Must pay for the Spend & Save account to receive interest
  • Spend & Save account interest on balances over $10,000 drops to 0.10%
  • No branches
  • No cash deposits
  • Customer service issues were reported two years ago

Summary

CredentialsB Corp
Impact areas• Poverty, water, education, environment, health, human rights
• Aspiration Opportunity Fund provides microloans to small businesses
Minimum balance$0
Account maintenance fees• Aspiration account: pay what you want
• Aspiration Plus account: $7.99/month ($5.99/month if you pay upfront for the year)
Interest• Aspiration account: none
• Aspiration Plus account: 1.00% on balances up to $10,000 if you spend $1,000/month (0.25% if you spend less than $1,000/month); 0.10% on balances over $10,000 irrespective of spending
ATMs• 55,000 free in-network ATMs nationwide
• 1 free out-of-network ATM withdrawal per month for Plus accounts
AppHighly rated app
Accounts offered• Checking and savings accounts
• Taxable investment accounts
• IRAs
LocationsOnline-only

What is Aspiration?

Founded by Andrei Cherny in 2013, Aspiration is a fintech company with social and environmental goals. Before Aspiration, Cherny worked on climate issues for Bill Clinton and Al Gore.

Aspiration’s mission is to help customers “make money while making the world a better place.” It’s the only financial institution that lets you pay what you think is right for basic checking and savings account services. Aspiration also donates 10% of fees to nonprofits. And you can be sure that none of your money goes to fund fossil fuels.

Aspiration offers checking and savings accounts, IRAs, investment accounts, and a fossil free mutual fund. And it’s about to launch a carbon-neutral credit card, Aspiration Zero, to the general public.

But it’s the cool extras that make Aspiration shine. As an Aspiration customer, you get a sustainability score for your spending habits, cash back when you spend at sustainable businesses like TOMS or Reformation, and carbon offsets when you buy gas. They even let you plant trees by rounding your change to the nearest dollar.

Aspiration Spend & Save accounts (checking and savings accounts)

Aspiration Spend & Save accounts are designed to replace your traditional checking and savings accounts.

The money you spend through the Spend account earns cash back, and deposits in the Save account earn interest (if you sign up for Aspiration Plus). You can choose to only open the Save account if you prefer to use a checking account elsewhere. And they let you transfer money in and out of the Save account without penalties.

The minimum deposit for opening an account is only $10.

The Spend & Save accounts offer:

  • Unlimited free withdrawals at over 55,000 ATMs nationwide through the Allpoint network
  • Cash back rewards on sustainable purchases
  • FDIC insurance for up to $250,000
  • Guarantees that your deposits will not fund oil exploration or production
  • Option to plant a tree with the roundup of your spending to the nearest whole dollar
  • Aspiration Impact Management, a personal impact score for your spending 
  • The option to get paid your salary up to two days early
  • A free first set of checks linked to the Spend account
  • A highly-rated mobile app

Account fees. You can choose between Aspiration, the basic account, and Aspiration Plus. You can pay any amount you want for the basic account (even $0), and Aspiration Plus costs between $5.99 and $7.99 (the lower amount if you pay upfront for the year).

AspirationAspiration Plus
Welcome bonus$150$200
Account feePay what is fair$7.99 / month ($5.99 / month if you pay annually)
Cash back on Conscience Coalition purchases3-5%10%
APYNone1% APY for the first $10,000 (assuming you spend $1,000 / month, otherwise 0.25%), then 0.10% APY on funds over $10,000
Out-of-network ATM reimbursementNone1 / month
Carbon offsets for gas purchases (Planet Protection)Included
Personal Impact Score (AIM)IncludedIncluded

Interest. Only the Aspiration Plus account earns interest: you get 1% APY for the first $10,000 you deposit if you spend $1,000 / month on your debit card. Interest gets less attractive (0.10%) on deposits over $10,000.

Welcome Bonus. Aspiration is currently offering a welcome bonus of $200 for the Aspiration Plus account. You must spend $1,000 within the first 60 days of opening the account to qualify.

Aspiration Impact Management (AIM). Aspiration founder Andrei Cherny called the AIM score a “Fitbit for sustainability.” Aspiration tallies up your purchases and shows you a personalized sustainability score based on where you shop. The scores update in real-time and are available within the mobile app. 

To come up with AIM scores, Aspiration uses data to rate companies on social and environmental metrics like employee pay, workforce diversity, greenhouse gas emissions, and renewable energy use. The data comes from environmental, social, and governance (ESG) data providers, such as HIP Investor, Insight360, and others. Aspiration uses over 75,000 data points, though they have not disclosed exactly how the proprietary algorithm works.

Local businesses that don’t have public data are invited to submit that information to Aspiration.

Cash back rewards. Aspiration lets you earn cash back rewards when you shop at businesses with high AIM scores or at businesses that are part of the Conscience Coalition, a network of purpose-driven companies.

When you shop at businesses with the highest AIM scores, you get 0.5% cash back. These businesses currently include:

  • AT&T
  • Allstate
  • Anthem
  • Apple
  • Boots
  • CVS
  • Cricket Wireless
  • DirecTV
  • Disney
  • Drugstore.com
  • Duane Reade
  • Esurance
  • Experian
  • Facebook
  • Google
  • Microsoft
  • Skype
  • Turbotax
  • USA Drug
  • Unilever
  • Walgreen’s
  • Xbox
  • YouTube
  • Zagat 

In practice, while you may shop at drugstores or spend with AT&T, you are unlikely to be buying anything from Unilever or Zagat directly. We would also question giving Facebook the highest AIM score given data privacy issues. According to Aspiration, the list of companies with the highest AIM scores can change at any time.

If you shop with Conscience Coalition members, you can earn up to 10% cash back. The coalition has 20 members:

  • Arcadia Power
  • Blue Apron
  • Burst
  • Causebox
  • Cloud Paper
  • Dropps
  • FEED Projects
  • Girlfriend Collective
  • Goodwings
  • Imperfect Foods
  • Known Supply
  • LOLA
  • Parachute Home
  • Reformation
  • Soapbox
  • This Bar Saves Lives
  • TOMS
  • United By Blue
  • Warby Parker
  • MiiR

If you are enrolled in Aspiration Plus, you earn 10% cash back on all Conscience Coalition purchases. If you are not, you earn between 3% and 5%, depending on the merchant. The merchants are mostly trendy consumer startups, so you may or may not be shopping with them.

5% cash back (if you are not enrolled in Aspiration Plus):

  • Reformation
  • Warby Parker
  • United By Blue
  • Parachute Home
  • Causebox
  • Cloud Paper
  • LOLA
  • Goodwings
  • Burst
  • MiiR

4% cash back (if you are not enrolled in Aspiration Plus):

  • TOMS                           
  • Known Supply
  • Soapbox

3% cash back (if you are not enrolled in Aspiration Plus):

  • Arcadia Power
  • Feed Projects
  • This Bar Saves Lives
  • Blue Apron
  • Girlfriend Collective
  • Imperfect Foods
  • Dropps

Planet Protection. Aspiration Plus accounts come with the Planet Protection feature, which offsets your car’s carbon emissions. To determine the required offset, Aspiration tracks your gas purchases and estimates how many gallons you’ve purchased using the national average gas price. Then they use Environmental Protection Agency (EPA) data to calculate the amount of carbon you’ve emitted and purchase offsets for the required amount. Aspiration is currently buying carbon credits from Cool Effect and 3Degrees. Carbon credits are extinguished after they are bought. 

Plant Your Change. The Plant Your Change feature is available to both Aspiration and Aspiration Plus customers. They even let you opt in by linking a credit or debit card from another bank. Once you opt in, each purchase you make is rounded up to the nearest dollar. The spare change goes to planting trees in partnership with Eden Reforestation Projects

Aspiration lets you know how many trees are planted with your spare change. They also let you earn cash rewards if you reach tree-planting milestones while spending on your Aspiration card:

  • 30 trees planted = $5 reward
  • 100 trees planted = $10 reward ($15 cumulative)
  • 500 trees planted = $25 reward ($40 cumulative)
  • 1,000 trees planted = $50 reward ($90 cumulative)
  • 2,500 trees planted = $100 reward ($190 cumulative)
  • 5,000 trees planted = $200 reward ($390 cumulative)

The maximum cumulative payment per customer is $390.

Investing with Aspiration: Aspiration Redwood Fund (REDWX)

  • Date launched: 2015
  • Assets under management: $138 million
  • Fee: 0.50%
  • Minimum investment: $10

Aspiration also lets you invest through their fossil free mutual fund, the Aspiration Redwood Fund (REDWX). It is available both through a taxable investment account and a tax-advantaged IRA. The fund’s day-to-day management and stock selection are outsourced to a team from the investment bank UBS.

REDWX Holdings. Launched in November 2015, the Redwood Fund is an actively managed mutual fund that invests in large-cap U.S. stocks. As of May 2021, the fund had 42 holdings, mostly in technology, financial services, industrials, and healthcare stocks. The top three holdings were Microsoft, Visa, and VMware. As advertised, the Redwood Fund has zero exposure to fossil fuels and a rare A rating from Fossil Free Funds. The fund also has high ratings from ESG rating agencies Sustainalytics (part of Morningstar) and MSCI.

REDWX Performance. The Redwood fund returned over 18% annually over the past five years, outperforming its mutual fund peers and the large-cap index, Russell 1000. However, its portfolio management team changed in September 2020, so the past track record is less relevant.

REDWX Fees. The fund’s fee – 0.50% – is reasonable for an actively managed mutual fund (though higher than for most environmental, social, and governance ETFs). The $10 minimum investment is much lower than the $2,500 many mutual funds require.

Should you buy REDWX? The fund owns fewer than 50 stocks and has a new management team, so we do not recommend putting all your IRA or savings in it. A balanced portfolio also needs to include bonds and possibly other asset classes like international equities.

🔔 Check out our review of the Redwood Fund.

Aspiration IRA

Aspiration offers a traditional IRA that lets you invest in the Redwood Fund. They support rollovers and require a $10 opening deposit. Roth IRAs are currently not supported. There is a $15 annual maintenance fee. 

Aspiration credit card   

Aspiration is about to launch a carbon-neutral credit card, Aspiration Zero. You can sign up for the waiting list here.

Who owns Aspiration?

Founded in 2013 and launched to the public in 2015, Aspiration raised over $200 million from over 40 investors. Aspiration investors include Alpha Edison, a Los Angeles venture capital firm, UBS O’Connor, DNS Capital, Radicle Impact, Sutter Rock, and Social Impact Finance. Actor Leonardo DiCaprio was one of the early backers.

Is Aspiration safe? Are deposits FDIC-insured?

Yes. Though Aspiration is a broker-dealer, not a bank, Aspiration partners with eight banks to ensure your deposits are FDIC-insured for up to $250,000.

The Redwood Fund is a mutual fund, not a bank account. As with any investment, its value is not guaranteed, and any money invested in the Redwood Fund may lose value.

💰 Takeaway

If you care about the environment, it’s worth switching to a bank that won’t lend to companies that are harmful to the planet. We believe that Aspiration is one of the best ethical banking choices in the U.S.


🔔 Interested in other sustainable bank accounts? Check out our guide.

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