A Fintech company offering savings modules with an interest rate of 4%

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With inflation at an all-time high of 8.3%, consumers hoping to earn more on their deposits should consider stashing their money in places other than traditional checking or savings accounts. A new fintech company, Current, is offering consumers an annual percentage yield, or APY, of 4.00% on up to $6,000 in savings, exceeding the interest rates offered by many traditional banks.

In contrast, the average annual percentage return of a traditional savings account is 0.13%, according to Depositaccounts.com. Although a checking account does not have an APY that tracks the rate of inflation, it still provides one that is more than 30 times higher than the average for traditional savings accounts.

Below, Select takes a look at Current’s many features to help you decide if it’s right for your financial needs.

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What is the current?

The fintech company was founded in 2015 by former Morgan Stanley forex trader Stuart Sopp. Current provides a fully online banking service, offering multiple products – a debit card and bank account in addition to various budgeting tools – through an app available through the App Store and Google Play.

The company’s main product, however, is its bank account and savings modules, which are free to consumers. Note that Current does not perform a credit check when you apply, but instead uses your social security number to verify your identity.

Those who sign up for Current receive one account and three virtual savings modules. Each savings module earns an APY of 4% and can hold up to $2,000. In this case, the annual percentage yield refers to the interest a consumer can earn over the course of a year. Interest payments are paid daily and are deposited directly into your account.

Fluent

  • Annual Percentage Yield (APY)

    4% on up to $6,000 ($2,000 in each savings module)

  • The minimum balance

    No minimum balance restriction, but you will only earn interest on any amount over $0.01 in your savings module

  • Monthly fee

  • Maximum transactions

    No limit to the number of times per day and no maximum dollar limit for rounded transfers from the checking account to the savings module or for online transfers from the spending account to the savings module

  • Overdraft fees

    Current allows you to overdraft up to $200 with no overdraft fees. See conditions.

  • Offer a current account?

  • Offer an ATM card?

Advantages

  • Offers higher APY on savings modules than most high-yield savings accounts
  • No monthly fees

The inconvenients

  • Current interest is only available on a maximum of $2,000 per savings module, up to a maximum of $6,000

If you want to maximize the amount of interest you can receive from Current, you’ll want to deposit $2,000 into each of your savings modules to ensure you earn $240 in interest over the course of the year.

Even popular high-yield savings accounts don’t offer interest rates as high as 4%. For example, Goldman Sachs’ Marcus and Ally Online Savings Account, both rated by Select as one of the best high-yield savings accounts, only provide an APY of 0.60% at press time. You would need to put $40,000 into an account with an APY of 0.60% to earn the same $240 you would earn with Current’s 4% APY on $6,000.

While consumers are generally limited to making six withdrawals per month or per statement cycle with high-yield savings accounts via Regulation D, the Federal Reserve has temporarily lifted this restriction due to the Covid-19 pandemic. Since Current isn’t technically considered a savings account, it’s not subject to D-regulation limits anyway.

With Current, customers simply transfer money from their savings modules to their spending balance to access it. They can also make unlimited withdrawals from this balance.

Currently, the FDIC is insured up to $250,000 through Member FDIC’s Choice Financial Group.

What features does Current offer?

A number of features, such as rounding, Overdrive™ and faster direct deposit, are available through Fluent. Round-up works similarly to apps like Digit or Acorns, which automatically round up your purchases to the nearest dollar and allocate the difference to your various savings goals, in this case placing the money in a money capsule. savings or donation capsule.

Current also offers what it calls giving pods through its teen accounts, allowing teens to donate funds to an organization of their choice instead of saving for individual goals through savings pods. Teen accounts include the app as well as a debit card. Parents can transfer money to these accounts, monitor the retailers their teens shop at, block certain merchants, and set spending limits.

Regular checking accounts also come with a Visa Debit card, which offers rewards — in the form of current points — at select retailers. You can earn up to 15x Current points from brands like Family Dollar, 7-11, Subway, and KFC, among others. Current points can be redeemed in the current store, although the company does not publicly disclose the items available through it.

Since Current is an entirely online fintech service, customers will not be able to visit physical stores to withdraw or deposit their money. If you want to withdraw cash without paying a fee, you’ll need to find an Allpoint® ATM – you can use the app to locate available ATMs nearby. If you are not using an Allpoint ATM, you will be charged an additional $2.50 fee on top of the ATM operator fee.

Current has no overdraft fees and you won’t need to meet any minimum balance or minimum deposit requirements to open an account.

Another benefit of Current is faster and easier access to cash. Current account members can receive their paycheck up to two days earlier, while qualified members can overdraft up to $200 without paying overdraft fees – this particular benefit starts with users being authorized overdrawn $25 and may be increased depending on various factors.

At the end of the line

Current is a good choice for consumers looking to earn extra money on their deposits. Although you can only save up to $6,000 in total ($2,000 per savings module) with the 4% APY, this interest rate stands out from others currently offered on savings accounts. high-yield and traditional savings and checking accounts. .

While Current’s other offerings, such as its debit card and faster direct deposit feature, can be helpful in helping you rack up rewards or getting your paycheck sooner, the real value of having an account is the interest you will earn from your savings. pods. Current doesn’t reveal much about which retailers you’ll be able to earn points with or what you can redeem points for, so if you’re looking to earn rewards, you might be better off opting for cash back or a travel credit card with a more transparent program.

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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

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