Neobank Current Introduces 4% APY Feature for Savings
In recent years, savings account holders have likely seen the interest they earn from their funds fall tremendously. This decline has even been true among many FinTechs that have typically offered better rates than the big banks. However, one neobank is now rolling out a new feature that will allow customers to earn interest that’s 60 times higher than the national average.
This week, Current announced that customers will be able to earn the 4% APY. Specifically, this rate can be earned on up to $2,000 in funds placed into the Savings Pods featured in the app. Additionally, while Basic (free) users are limited to just one Pod, Premium customers can create up to three pods, enabling them to earn the increased APY on up to a total of $6,000 in savings. A Premium account comes at a cost of $4.99 per month. Of note, funds are held with Choice Financial Group and are FDIC insured.
As Current notes, the rollout of this new feature comes as inflation has been impacting the U.S. economy. In fact, in December, the Consumer Price Index showed a 7% year-over-year increase. That marks the largest jump observed since 1982.
The rollout also arrives as Current has shown impressive growth. The company reports that they currently have more than 3 million users, with an average customer age of just 27 years old. According to eMarketer data, that user figure makes Current the second-largest neobank in the United States behind Chime (although the margin between the two is significant).
While FinTechs have been known to roll out attractive offers to gain users quickly, only to scale back their features later on, Current says that’s not the goal with this latest update. As the company’s VP of Product Josh Stephens told TechCrunch, “We’re not approaching this as a promotional rate. We’re approaching it as something that’s available for all for the foreseeable future…I think, certainly, you see promotional rates from other folks out there with a lot of bells and whistles attached to it. But this is something that’s available for anyone, with no balance minimum, no fees.”
For those who have been feeling the effects of inflation while growing frustrated with low savings account APYs, Current’s new feature could definitely be a big deal. Of course, those looking to max out this benefit would need to consider whether the $4.99 monthly fee to upgrade to Premium is worth it. Elsewhere, those seeking interest from other neobanks might consider One Finance (which offers 1% on most savings and up to 3% on “Auto-Save” funds), T-Mobile Money, and others.