Tech companies have been making the process of investing money easier for quite a while. Now, they’re turning their attention to disrupting a more basic part of your financial life: your checking account and debit cards. (Thank goodness, because this Clare V. tote I’ve been eyeing is NOT going to buy itself!)
It may seem like an area that doesn’t really need an upgrade. (I mean, when was the last time you even thought about your checking account or debit card… it kind of just works the way it works, right?). But debit cards are getting a high tech makeover, and people are literally clamoring to get their hands on them.
The first batch of 100,000 Acorns Spend debit cards sold out in four days when sign-ups launched in June, and there’s now a waitlist to get one. Meanwhile, since SoFi Money announced its product, tens of thousands of people have added their names to a growing waitlist.
Why all the demand? Essentially, these digital-only banks are doing for personal checking what Uber did to hailing a cab—making it a more streamlined, seamless, convenient process. They’re also making the accounts feel exclusive via attention to design and limited access. (Maybe they’ll even improve a generation’s ability to manage money in the meantime?)
Here’s what you need to know about how these first two cards compare, and there are sure to be more to follow.
Brought to you by the wildly popular investment app Acorns, Acorns Spend costs three dollars per month with no additional fees. That rate gets you the checking account plus the company’s other two products, the eponymous investment account, and the retirement fund, Acorns Later. (You’ll have all three on the app by default, but you don’t have to fund the other two if you’re just interested in checking.)
The app has all the features you’d expect from your establishment bank, like mobile deposit and easy transfers. Its primary selling point is that it builds on Acorns’ original innovation: Acorns takes the spare change from every purchase you make and makes a fractional investment in a stock and bond portfolio created by the pros. Since the barrier to entry is so low (you don’t have to stress about picking stocks, or even think about making deposits) anyone can turn their pennies into profit over time.
The card itself is also super unique. Acorns tapped a design firm run by a longtime industrial designer for Apple. The result is a solid (it’s much heavier than an average debit card), sleek card in bright, playful, nature-meets-money green.
Acorns is not a physical bank, but you still get unlimited free ATM withdrawals, including reimbursement for fees charged by the banks that own the ATM. Now that’s enough to make me sit up and listen. I hate those pesky fees!
SoFi is a company that specializes in student loan refinancing, mortgages, and other personal loans. It’s totally free to sign up, has no fees, and also offers free ATM withdrawals, although it only reimburses fees from other banks up to six times per month.
SoFi’s biggest point of difference is that it combines checking and savings into a single account that earns 1.1 percent interest. (The company says that’s more than quadruple the rate of most big banks.)
The Sofi Money card itself is not as design-forward as the Acorns card, but it’s still more aesthetically interesting than a standard card. I love that vertical design too… it’s a trend!
SoFi also says its technology utilizes machine learning and data analytics to provide users with information about how people who are similar to you spend and invest their money, so you can see how you stack up.
This education idea is where the finance world seems the most ripe for disruption: SoFi offers free access to services like career coaching, and Acorns Spend offers smart tips and content related to becoming more financially savvy. Just like a Nest thermostat’s machine learning can teach you how to save energy over time, these companies are banking (sorry) on the fact that you’ll come for the cash management, and stay for the education.
Have you tried Acorns Spend or SoFi Money? Do you need investment, savings or retirement advice? Share your experiences so far in the comments, below!