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A year ago, Empower launched its personal finance app that combined and tracked your banking and credit card accounts. The goal back then was to replace your bank’s mobile app. Now it wants to replace your bank.
On Wednesday, the fintech company unveiled its own checking and savings accounts aimed at younger adults who have become tired of account fees and low savings yields from the traditional big banks.
The offerings, previously in a private beta test, are now open to the public and interested consumers can join the wait list on the company’s website or via its app.
Empower joins a growing number of nontraditional financial companies — such as Stash, Varo and Chime — providing banking services to the 20- and 30-something demographic.
“I think there is a general frustration from every one of us that we are being negatively impacted by the financial system in this country,” said Warren Hogarth, CEO and co-founder of Empower. “We saw this opportunity to take this app and work really hard to build a bank that we would like to see.”
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Empower’s checking account comes with a cashback debit card that earns 1 percent, up to $10 a month. More importantly, it lacks maintenance, overdraft and foreign transaction fees along with no minimum account balances, features often found at larger banks. Its savings account earns 1.85 annual percentage yields, or 37 times what the major banks offer.
Account holders can access their money for free at 25,000 ATMs using the MoneyPass ATM network. Empower also will reimburse one out-of-network ATM fee each month. All funds are FDIC-insured up to $250,000 through Empower’s partner bank, Evolve Bank and Trust.
The bank accounts also complement the company’s app that provides a virtual assistant that links up all financial accounts, tracks spending and provides tips for better money choices. The company declined to disclose how many people use its app, though Hogarth said users were largely millennials.
Empower doesn’t plan to stop there. Its next goal is to offer lines of credit that don’t rely on traditional credit profiles for approval, another break from the conventional qualification process at more established banks and lenders.
“We are very focused on how people who are financially responsible are disadvantaged by the current credit system,” Hogarth said. “We want to lend to people who have chosen not to have a credit card but have shown financial responsibility through saving and investing.”