Drake Loves This New Eco-Friendly Bank. Should You Open an Account?

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The Los Angeles-based bank offers clients ways to offset their carbon footprint.

Aspiration, a bank whose mission is to help the environment, has picked up several high-profile investors. Leonardo DiCaprio, Robert Downey Jr., and Orlando Bloom are a few of the most famous, and best-selling rapper Drake is the latest to sign on.

Drake isn't just investing -- he also wants to use Aspiration's services to reduce his carbon footprint and potentially reach carbon-neutral in his personal life. The bank offers this service to all its clients, but it's more challenging with a celebrity who travels the world.

It's great news for Aspiration, which started serving customers in 2015 and now has over 4 million members. If you're interested in the bank, here's what sets it apart and more about the financial products it offers.

About Aspiration Bank

The bank offers several ways for clients to help the planet and shop in ways that match their values.

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Aspiration says it's 100% committed to clean money. While many other banks lend money to fossil fuel projects, Aspiration pledges that deposits won't fund fossil fuel exploration or production. It also donates 10% of its earnings to charities.

One of its most notable features is called Plant Your Change, which rounds up every purchase to the nearest dollar and uses the extra money to plant a tree. You don't need to be a member to do this -- Aspiration lets you link debit and credit cards from other financial institutions. According to Aspiration's website, it has planted over 6 million trees so far.

Also, the bank provides an Aspiration Impact Measurement (AIM) score to sum up how businesses treat the planet and their employees. Members can see the AIM scores for businesses in their transaction histories to see how their shopping choices make an impact.

Aspiration's bank accounts

The heart of Aspiration is its Spend & Save bank accounts. Spend is its version of a checking account, and you can make purchases with it using a debit card. Save isn't technically a savings account, but as the name suggests, saving is its purpose.

There are two banking plans to choose from: Aspiration and Aspiration Plus. The Aspiration plan operates on a "pay what is fair" system. You decide how much to pay every month, and you could even choose to pay $0 if you wanted. Aspiration Plus costs $5.99 per month (if you pay annually) or $7.99 per month (if you pay monthly).

Both plans offer the following:

  • 55,000 free in-network ATMs where you can withdraw money
  • The optional Plant Your Change to round up your purchases and plant a tree with every purchase
  • AIM scores to evaluate the impact of your shopping
  • Cash back with partners of Aspiration in its Conscience CoalitionTM (you earn between 3% and 5% on the regular Aspiration plan, and 10% on the Aspiration Plus plan)

In addition to a higher cash back rate on Conscience CoalitionTM purchases, the Aspiration Plus plan includes a few more benefits:

  • Up to 1.00% APY on the first $10,000 in your Save account
  • One monthly out-of-network ATM reimbursement
  • Aspiration measures the carbon impact of all your gas purchases and buys carbon offsets to counter the climate impact

Interest rates with the Aspiration Plus plan are a bit complicated. You can earn 1% on the first $10,000 in your Save account if you meet a spending requirement of at least $1,000 on your Aspiration debit card. If you don't meet that requirement, the APY is 0.25% on up to $10,000. Any funds over $10,000 earn a 0.10% APY.

When you fulfill the spending requirement, Aspiration Plus offers a competitive APY that outdoes many high-yield savings accounts. However, that doesn't necessarily make it better than those other options, because there's a monthly fee and you only earn its highest APY on the first $10,000.

Aspiration Zero credit card

Aspiration plans to release a credit card promising a tree planted for every purchase. The Aspiration Zero credit card will have a $60 annual fee, and every time you buy with it, Aspiration plants a tree. You can also activate a round-up feature -- Aspiration then rounds up each purchase and uses the money to plant another tree.

As an incentive to offset your carbon footprint, the Aspiration Zero credit card offers 1% cash back on purchases -- if you reach that goal. Aspiration calculates that 60 trees planted per month offset the average American's carbon footprint.

The cash back rate doesn't come close to the top credit cards, so this isn't the card for maximizing rewards. But it's a good extra feature.

There's currently a wait list for the Aspiration Zero credit card. Sign up to be among the first to get the card.

Aspiration Redwood Fund

The Aspiration Redwood Fund is a mutual fund for sustainable investing. To choose where to invest, Aspiration evaluates companies' environmental, workplace, and governance practices.

You can open a general investing account or an individual retirement account (IRA) with Aspiration to invest in this fund. There's a $10 minimum opening deposit. The fund's expense ratio is 0.5%, a reasonable amount compared to the best mutual funds.

Aspiration has an admirable mission that has helped it raise money and bring in millions of members. But even better, this isn't a situation in which the mission overshadows the financial products. The services offered by Aspiration, especially its bank accounts, strike a balance between helping the planet and providing valuable benefits to clients.

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