Last year I would have never had thought that I would be reviewing a new savings account with a yield of only 1.30%. In today’s new zero rate environment, that is unfortunately a top rate for a savings account. The new savings account is from the financial technology (fintech) company, Affirm, which has partnered with Cross River Bank to offer the savings account through Affirm’s mobile app. Opening the savings account and managing the account can only be done through the app. There’s no access through Affirm’s website.
Affirm’s primary business that has been in operation since 2012 is the offering of loans that can replace credit cards. Affirm provides loans that allow shoppers to pay for goods and services over time with fixed monthly payments. Early this year, Affirm decided to add a savings account to their offering.
Affirm Savings Account Features
The Affirm savings account has no minimum balance requirements and no monthly service fees. The details of this account are described in the Deposit Account Agreement document. A link to this document is available in this FAQ on Affirm’s website. A few important things to note from this document include:
- Interest rate may change at any time.
- There are no minimum balance requirements to open this Account, avoid fees or to obtain the disclosed APY.
- Interest will be compounded on a daily basis and will be credited to your Account monthly
- If you close your Account before interest is credited, you will not receive the accrued interest.
- Deposits must be done by ACH or by Wire Transfer. Checks for deposit and cash deposits at ATMs are not accepted.
Affirm has an ACH transfer service that’s managed through the app. It appears to be a typical type of ACH transfer system in which you are first required to establish links to other bank accounts. Affirm has FAQs on adding funds and withdrawing funds using this transfer system.
There’s no listed limit on the amount that can be transferred to and from linked bank accounts. I confirmed the lack of a dollar limit with a CSR yesterday. However, the disclosure does say that they “reserve the right to establish (and change) maximum dollar limits for withdrawal transactions from time to time.” There’s also no dollar limit on ACH transfers that are initiated from your other banks. The Affirm savings account has routing and account numbers that can be used at your other bank to establish a link.
No Joint Accounts and No POD Accounts
The Affirm savings account can only be opened as an individually-owned account. As the disclosure states, “you may not add a joint-owner to your Account.” According to a CSR, beneficiaries cannot be designated on the savings account. So there’s no option for POD or ITF accounts.
I don’t think Affirm designed the savings account for savers who want to deposit $100k+ of funds. They appear to be targeting customers, specifically the younger generation, who would be interested in their loan service and would only have a relatively small amount in savings.
Even though the savings account may not be intended for large savers, I have not been able to identify account limits that would inhibit large savers. The current interest rate (1.30% APY) applies to all balances, with no stated balance cap. They have an ACH transfer service that’s managed through the app, and there’s no listed limit on the amount that can be transferred to linked bank accounts. Many small online banks tend to have low dollar limits on the amounts that can be transferred to linked accounts via their ACH transfer service. If Affirm does place dollar limits, you should still be able to initiate ACH transfers from your other bank account without a dollar limit.
The main deal killer for many large savers is likely the inability to open joint accounts or accounts with beneficiaries (i.e. POD or ITF accounts). Only individually-owned accounts can be opened. This prevents customers from extending FDIC coverage over the standard amount ($250k) through joint accounts and POD accounts.
As a new savings account, it’s questionable if the Affirm savings account will maintain a rate-leading status. Very few new online banks maintain savings account rates that remain above the well-established online savings account rates for the long run. New online banks often maintain top rates during all or part of the first year, but the rates eventually fall to levels that are near or below the rates offered by the well-established online banks. So unless the new savings account has a rate guarantee or some unique feature, opening a new account is often not worthwhile.
Affirm is offering accounts nationwide. Anyone 18 years or older with a valid Social Security number or Taxpayers Identification Number and with a residential address in the U.S. can open an account.
Only individual accounts can be opened with Affirm. Joint accounts are not allowed. Also, no beneficiaries can be designated.
According to Affirm’s FAQ on account opening, “Opening an Affirm savings account won’t affect your credit score, and closing an account won’t affect it either.”
The account opening FAQ currently states that “For the time being, the Affirm savings account is invitation-only.” However, I was told by the CSR that invitations are no longer necessary.
Applying for the Affirm savings account can only be done by using the Affirm mobile app. There is no application on Affirm’s website. Note, mobile apps can also be run using a tablet instead of a smartphone. The device just has to run Apple iOS or the Android operating system.
The account opening FAQ does leave out details about applying via the app. I was told by the CSR that you must first open an Affirm account before you can apply for the savings account. When you first open the app, click on the “Get Started” button. You’ll then have to provide your mobile phone number and your email address to gain access to the app and the application for the savings account.
To get help with the application or with other account questions, Affirm’s customer support team is available from 7am to 7pm CST every day of the week at (855) 423-3729. Note, I was not able to find this contact information on Affirm’s website. I was only able to find it at Affirm’s Twitter feed.
Affirm is a financial technology company that has partnered with Cross River Bank. The savings accounts are held by Cross River Bank, member FDIC, and the savings account deposits are FDIC insured up to the applicable limits. This partnership can be confirmed at this Cross River Bank web page which shows the Affirm logo at the bottom.
Cross River Bank has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 2.51% (excellent) based on December 31, 2019 data. In the past year, Cross River Bank has increased its total non-brokered deposits by $246.94 million, an excellent annual growth rate of 21.57%. Please refer to our financial overview of Cross River Bank (FDIC Certificate # 58410) for more details.
Established in 2008 by French-born entrepreneur and finance industry veteran Gilles Gade, Cross River Bank is currently New Jersey’s 14th largest bank, with assets in excess of $2 billion.
Born in the aftermath of the 2008 financial crisis, Cross River was built with the goal of providing access to credit to consumers in need. Since then, it has evolved into a national technology leader, providing innovative fintech solutions across the country. Cross River has received outstanding recognition for its leading technology, community commitment, innovations in financial services and unmatched workplace culture.
How the Affirm Savings Account Compares
When compared to the Savings Accounts tracked by DepositAccounts.com that are available nationwide, Affirm’s Savings Account APY currently ranks first.
The above rates are accurate as of 7/9/2020.