Check Out Aspiration Bank Review And Know Everything About It!
Aspiration is a financial services company that allows people to invest their money in two mutual funds and/or a checking account. The company alleges that it makes investing as cheap as possible by letting their customers pay what they deem fit for their services. Aspiration Bank review looks into the working and facilities given by the company and how it fares in real life.
Table of Content
Aspiration Bank Review
What is Aspiration?
The company was founded by Andrei Cherney, a lawyer with impressive accomplishments: a fellow at Harvard Kennedy School of Government, speechwriter for John Kerry and Al Gore, assistant district attorney.
Aspiration claims to offer the following three products to its customers:
Redwood Fund: The focus is on those “companies whose sustainable, environment and employee practices result in their being poised for growth”. This is known as SRI or Socially Responsible Investment. UBS Bank manages its funds.
Flagship Fund: It focuses “long-term growth with less volatility than the stock market”. UBS Bank handles its funds.
Summit Account: It is a checking account with a 1.00% annual yield. Radius Bank is responsible for providing these accounts.
If you are not sure about the difference between a checking and savings account, then check out the Debugging Checking Account and Savings Account.
Aspiration’s fee structure- Pay-What-You-Want
Aspiration boasts its “Pay-What-You-Want” phrase extensively. But it is not a non-profit; it is an investment company which needs money to function. So how does it work?
All the investors will be charged their pro-rata share of the underlying funds’ expenses. It is expected to be 1.22% a year in the Aspiration funds’ prospectus. Moreover, though the fund doesn’t have a set portfolio-management fee, it does have other operating costs placed at half a percentage point.
The claim can easily mislead customers to think that you can pay what you want for their services. But you would actually be paying a maintenance fee of about 1.72%.
If you look at the bigger picture of the investment world, 1.72% is a standard fee for the account type it provides. In general, the average rate is 1.75%.
But the place where Aspiration seems to loosen the slack is that it doesn’t charge any fee. Most of the financial advisors and investment firms will either charge a flat fee or a commission for the services provided. This is the reason why many people invest in Money Market accounts. But do you know What Are Money Market Account Advantages And Disadvantages?
In the End?
The “Pay-What-You-Want” philosophy is hard to argue with. However, the fact is that it does cover the 1.72% maintenance fee. The three products or accounts offered are also great and each account type defines an increase in the risk factor. You can certainly consider Aspiration for your investment plan if you can look past its shady proposal of payment. If not, you might wanna look around a little bit. And you can always check out The 7 Best Short-Term Investment Plans For You!