I had a laugh this morning when I scanned my banking transactions and saw a credit of $0.01. The transaction description read Interest Paid. This is common, of course, as average savings account APY totals just 0.09%.
As fintechs seek to gain consumers’ trust, attention, and their deposits, some have launched high interest earning accounts to lure them in. Plenty of banks already offer such accounts, and now fintechs have decided its time to follow suit. Here’s a run-down of the players in the game thus far:
MaxMyInterest
- Launched in 2013
- Checking product launched September 2019
- APY: 2.28% on savings, 1% on checking
- The fine print: MaxMyInterest was one of the first fintechs to start playing the high interest savings game, and built its entire business model around the concept. Membership for either savings, checking or both costs 8 basis points per year. Accountholders with balances over $10,000 will be reimbursed for up to $200 per year by Max’s banking partner, Radius Bank. Outside of the membership fee there are no fees and no minimum balance requirements.
Simple
- Launched September 2018
- APY: 2.02%
- The fine print: Requires a minimum balance of $2,000
WealthFront
- Launched February 2019
- APY: 2.57% at launch, currently 2.07%
- The fine print: After the Federal Reserve cut its benchmark rate twice WealthFront dropped the APY to 2.32% and then again to 2.07%. The account minimum is $1 and Wealthfront does not charge monthly fees.
T-Mobile in partnership with Bank Mobile
- Launched April 2019
- APY: 4%
- The fine print: Accounts with balances up to $3,000 earn 4% APY, accounts with balances over that threshold earn 1% APY. There are no fees or minimum balance requirements but account holders must deposit at least $200 per month into the account to earn 4% APY.
Betterment
- Launched July 2019
- APY: 2.69% at launch, currently 1.79%
- The fine print: When Betterment launched the account in July, it advertised that users could earn up to 2.69% APY until the end of this year, after which will drop to 2.43%. The company also noted that the interest is subject to change, which it did– two week after launch. The company dropped its APY to 1.79% in response to the Federal Reserve dropping the benchmark rate. Users who sign up for the company’s debit card can earn 2.04%. The account has a minimum balance of $10 and does not charge monthly fees.
Green Dot
- Launched August 2019
- APY: 3%
- The fine print: Interest, which is paid on a maximum of $10,000, is held in a separate account that the consumer is unable to access until the account anniversary. The high yield savings accounts must be opened in tandem with Green Dot’s Unlimited Cash Back account, which pays customers a 3% cash-back bonus on all online and in-app purchases. The account charges a $7.95 monthly fee if consumer’s purchases (excluding mobile bill payments, ATM withdrawals, and ACH transactions) are less than $1,000.
Coinbase
- Launched October 2019
- APY: 1.25%
- The fine print: Coinbase’s offering is set up as a rewards structure, not as an interest earning account. U.S.-based Coinbase customers earn a 1.25% APY reward on the amount of USD Coin (USDC) they hold in Coinbase. The reward is paid out in USDC, not U.S. currency. The offer is not available to accountholders in New York.
Credit Karma
- Launched October 2019
- APY: 2.03%
- The fine print: There are no fees and no minimum balance requirements. A maximum balance of $5,000,000 and transfer limits apply.
Robinhood
- Launched October 2019
- APY: 2.05%
- The fine print: The percentage is paid as a part of Robinhood’s Cash Management offering, a program that moves users’ uninvested cash to partner banks.