Ben Todd | Jun 2, 2017 | 1
Summit Checking Account Review
On the Aspiration website, you will see a web page for Summit. The Summit checking account is managed by the Aspiration Fund Adviser Company, but some of the banking processes and functions are conducted by other banks and services.
Having other banks and services take on some of the work is not uncommon. For example, some banks use outside brokerages when they sell investment services to their customers, and many banks use third-party call centers for their customer support.
Aspiration Fund Adviser, LLC is an SEC Registered Investment Adviser. They use bank level security with a 256 Bit encryption that is monitored 24/7, and any services where your money may be at risk are covered by the government’s Federal Deposit Insurance Corporation (FDIC).
About The Review Process And How Easy It Was This Time
Reviewing checking accounts, savings accounts and bank accounts is very difficult. One of the biggest problems is how long it takes to sign up top and try each service. Then there is the testing phase where I have to test the compliments and criticisms the company has received online, and then there is a background research I have to do, along with the online reputation research I have to do.
Yet, despite all the effort I had to put into researching the Summit checking account for this review, I rarely find it this easy to write about a bank. The reason for this is twofold. Firstly, there are a massive amount of articles online that claim this is probably the best checking account in the world (many of which are not being paid affiliate money for their posts), and secondly because of the tagline that the website uses on its Summit page.
The Review Writers Free Meal
On the Summit checking account page, it gives four very strong selling points that make it very easy to review. To give you an idea of just how easy it is. Imagine you were reviewing a hotel, and one had the tagline:
++ Comfortable beds, hot running water and clean toilets.
And the other hotel had the tagline:
++ Sexy chambermaids massage you, a free bar is open all night, and all your gourmet meals cost just one dollar.
Which would you find easier to review, the hotel that is like all the others, or the hotel with the strong and powerful selling points? Here is what is says on the Summit checking account web page.
Here Are Their Four Amazing Selling Points
Up to 1.00% APY (Annual Percentage Yield). No monthly service fees. Free access to every ATM in the world. FDIC insured.
Each of the selling points have their own terms and conditions, but our research shows that they are nothing unreasonable. The selling points you see are what you get.
If you know anything about checking accounts, you will know that those four selling points are solid gold.
The Terms And Conditions For FDIC – There Are None
There are no catches. You get all the benefits that Summit checking account claims you will get on their Summit page. Starting with the FDIC insurance, the deposits you make are processed by Redius bank, and they are members of FDIC. As members of the Federal Deposit Insurance Corporation (FDIC), they are able to protect your deposits up to the amount of $250,000. That means that if the Radius Bank or the Aspiration Fund Adviser goes bust or does something against the rules, then you may reclaim up to $250,000.
If you have more money kicking around in your checking account, then my suggestion would be that you start investing that money in something other than a checking account. My second piece of advice would be that you set up another checking account, maybe with this company, maybe with another company. Make sure the company/bank for your other checking account has FDIC insurance, and put in less than $250,000.
There are some banks and companies that offer sweep-account services. They transfer your checking account money over to another protected account if you go over $250,000 in your checking account. If you simply need more than $250,000 in your checking account, then find a company that insures excessive balances (they are rare), or find a bank that will insure amounts over $250,00 (they are slightly less rare).
Up To 1.00% Annual Percentage Yield
The more observant of you may have noticed the “Up To” in that selling point. It screams, “Catch!” and you would be right. You only get their 1.00% APR if your entire checking account balance is higher than $2500. If you have between of $0.01 and $2,499.99, then you only get an APY of 0.25%.
Do not discount this “catch” as something bad. There are very few bank accounts nationally or internationally that offer an APY or APR rate on your checking account balance. Usually, you need to put your money in a savings account to earn interest. 0.25% is better than nothing.
You need to open your account with more than $10, which is no hardship, and any fees you incur may lower your overall earnings, so don’t overdraw.
APY takes into account any compounding that happens over the year, whereas APR does not. Compounding means earning interest on the interest you have already earned. Here is a rough example to try and show you how APR and APY works.
APY is the better one for savers. So, let’s assume you keep the same amount in your account all year, and 12 months at 1% per month is a yearly rate of 12%.
+++ If that were the APR rate, then you would have earned 12% on your cash after a year
+++ If that were APY, you would have earned 12.68% on your balance over the year.
That is because APY takes into account the interest you earn every month and adds it into your earnings.
No Monthly Service Fees
If you take the Summit checking account with nothing extra, such as no overdraft and such, then it is free to use and not use. So long as you open it with a $10 deposit, you can leave it empty if you wish, or you can use it every day and there is still no charge.
I have reviewed bank accounts that say they offer an interest rate on your checking account, and then they charge you a fee for maintaining the checking account. Their justification is that if you keep enough in your checking account, then you make more from interest than you spend on fees. The Summit checking account doesn’t charge any maintenance or subscription fees.
Free Access To Every ATM In The World
“Ha” I hear you cry as your bellowing voice echoes around the room. How can they offer free ATM use for every ATM in the world? That would mean striking up deals with hundreds (maybe thousands) of financial companies and having them agree not to levy charges despite the fact that many countries charge a business fee (or tax) to ATM cash machines (its true, look it up, your local ATM may be paying business tax).
Summit hasn’t created deals with every ATM operator, they simply offer surcharge refunds. There is a little bit of a catch with this one. If you use a private ATM that says, “We charge for withdrawals,” then there is a small chance you will be not be rebated. If you put your card in a regular ATM and it charges a fee to you when it doesn’t to others, then they will refund your charge.
In defense of Summit and the Radius bank they use, Radius do quite a bit of work to find out if the ATM you have used is eligible for a rebate. Your fees will be refunded to you at the end of each statement cycle.
Some People’s Ruby Shoes Are Too Tight
I read an article by Money Under 30, who said that the Summit checking account has things missing. They were trying to find criticisms they could throw at the Summit account. Money Under 30 said:
- You should be able to use your phone camera to deposit checks
- They should give you rapid updates for your transactions and balances
- You should be able to schedule transfers
- They should offer fingerprint authorization
Frankly, the Summit checking account is a great account, and Money Under 30 are grasping at straws to find something to criticize. Summit doesn’t need the things that are listed above. They are a good company that even gives 10% of its profits to charity, which is not something you see banks doing.
Here Are Some Genuine Criticisms – If You Can Call Them Criticisms
I very high found a few things that are not perfect about Summit Checking Accounts. However, I don’t blame Aspirations for doing it because they have to make a little extra money here and there.
[-] They have high-unplanned overdraft fees. If you overdraw by accident, then Summit will charge you around one third more than other banks and online accounts will.
[-] Ongoing wire transfers, where you have planned and repeated transfers over a period of time will cost you around $40, which is more than most banks and online accounts.
[-] Outgoing wire transfers on their own, i.e. not routinely taken out, will cost you $40 per transaction. You should really use another method besides wire transfers.
[-] Receiving an incoming wire transfer costs $10. You should receive money via person-to-person transfers, and have your job pay you by direct deposit or check rather than by wire transfer (most domestic US companies use direct deposit because it is free for the receiver).
[-] Stopping a payment is going to cost you $25, which is far higher than most other banks and online accounts will charge.
[-] There is currently no mobile app, which isn’t a big problem at the moment, but more and more people are coming to expect mobile apps for their online accounts, so the lack of an app may become a problem in the future.
[-] They do not give you a checkbook, which isn’t a big deal for many younger people, but older bankers may prefer good-old-fashioned checkbooks.
[-] Paying bills is not impossible, as some reviewers are claiming, but it is not as easy as paying with a regular bank account. You can pay bills via single payments or by automatic debits (direct debits) with the Summit checking account, but the company hasn’t simplified the process yet.
Conclusion – Probably Is The Best Checking Account In The World
I have reviewed quite a few bank accounts in my days, and this is probably the first that has no features that grind my gears. There is nothing about this company or service that puts me off. They have high fees, but they are easy to avoid if you don’t use wire transfers and don’t make unplanned overdrafts.
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As a side note, when I applied, they asked questions that are generated by a credit bureau, and this SOBs know scary amounts about you. One of the questions was about my payments to a mortgage. I had paid it off years ago and steered clear of debt ever since, but they asked me about it and I told them the amounts I used to pay. However, the answer they were looking for was that I had paid it off, so I failed that question. It made verifying my identity take a little longer than it should.