Review of Beam

Beam doesn’t offer your everyday, run-of-the-mill savings account. Its mobile-only account is technically a cash management account as opposed to a traditional checking or savings account, and Beam itself isn’t a bank. Rather, Beam is a fintech company that partners with a network of nearly 200 FDIC-insured banks, where your funds are placed.

With a Beam account, you can earn at least 1.70% APY. There is the opportunity to increase your rate temporarily by collecting and spending interest rate boosts that Beam calls “Billies,” which are essentially tokens that you can earn from activities such as signing up for an account or inviting a friend to subscribe to Beam’s mailing list.

Beam only recently launched to the public, though, and it’s not yet clear what changes this company will make going forward. There are limitations of the account, too. For instance, Beam can’t serve as your only bank because it doesn’t offer a checking account. You also can’t deposit more than $15,000 in the account currently, although Beam is working to increase this limit in the future.

Still, if you’re aware of the limitations and are a tech-savvy person enticed by the potentially high interest rate, Beam might be worth looking into.

Beam account features

Because Beam isn’t a bank, your deposit is held in accounts with a network of banks that includes behemoths like US Bank, Citibank and Wells Fargo to gain coverage by FDIC insurance up to the legal limit. You can be assured that your funds will be covered up to $500,000. That’s double the standard $250,000 of coverage that most banks offer, and Beam is able to do this because it divides your funds among multiple FDIC-insured banks.

That’s a bit of a moot point, though, considering Beam only lets you deposit a maximum of $15,000 in the account as of writing. It has plans to increase the limit to $50,000 and upwards in the future, but for now, that’s a big limitation.

There are a few other things that might dissuade you from opening an account with Beam. First off, Beam only recently opened to the general public, which means it might still be working out some kinks. Beam also doesn’t offer a checking account or other types of deposit accounts, so you can only use Beam as a supplementary strategy to earn more on your savings.

Finally, you can only access your money by transferring it back into your normal bank account rather than with a wire transfer, ATM withdrawal, check or other method. Beam may enable wire transfers in the future, but for now that is not an option.

You can withdraw as much money as you want at any time with no monthly withdrawal limits, however, which may be handy because traditional banks often limit you to six withdrawals per month. However, you currently can only deposit $5,000 per week into your Beam account, so if you want to take advantage of the full $15,000 maximum deposit, you’ll need to stagger your deposits over the course of three weeks.

Earning interest rate boosts with Beam

One major plus of Beam is that it offers the potential to earn a high interest rate, if only temporarily, and it does so in a unique way. You’re guaranteed to get a base rate of 1.70% APY on your deposit, but you can temporarily increase that rate by collecting and spending the interest rate boosts that Beam calls Billies. You will automatically collect one free Billie every evening, and you will earn five Billies for every friend that you invite to subscribe to Beam’s mailing list.

The APY boost you’ll receive from using each Billie will vary, but it will only apply for one day before your rate reverts back to the base rate at the beginning of the following day. The interest payment you earned will be tallied up and credited to your account on a daily basis.

If any of the people you invite to Beam’s mailing list actually start using their account, you can unlock higher interest rates that are fixed (aside from any fluctuations due to Fed rate changes). This means that if you have a large network of financially-savvy friends, you could earn a solid interest rate boost with Beam. Currently, you can boost your rate permanently to 2.00% APY for referring two friends, 2.50% APY for referring four friends and 3.00% APY for referring nine friends. This campaign will last until December 1, 2019, and Beam may offer other campaigns like this in the future.

Beam fees and fine print

Beam charges no fees. Instead, Beam claims to make money “through software subscription service revenues from financial institutions.” Notably, Beam also does not charge ATM fees because you cannot withdraw money from your account by using an ATM.

There are also no minimum deposit or minimum balance requirements associated with Beam, making this account accessible for all.

Using the Beam mobile app

Beam is entirely mobile-based, as there is no online platform that you can log into through your desktop browser. On the app, you can earn Billies to boost your rate and view your current interest rate. You can also set up 24/7 alerts, which can help you track another account.

The Beam app is encrypted and has other security standards in place, which will offer protection against potential cybersecurity risks.

Opening a Beam account

Beam is only available to U.S. citizens or legal U.S. residents who are at least 18 years old. To apply for a Beam account, you must provide information about your external bank account as well as personally identifying information, such as a copy of a government-issued photo ID.

You can open an account by entering your email address on Beam’s website to sign up for the mailing list. You will then receive a download link, which you can open to start the application process.

Beam claims to have over 140,000 members as of October 2019, shortly after it launched to the public at the end of September 2019. Now that it’s open to anyone, people who joined the waiting list when the app was still in beta have been added to the mailing list and will receive a notification that they now can open a Beam account.

What else you should know about Beam

While Beam offers the potential to earn a high interest rate with no fees and no minimum deposit requirements, there are a number of downsides worth reiterating.

For one, this is only a supplementary account to your main banking strategy, and the interest rate boosts that you can earn to drive the APY over 1.70% only apply for one day. Additionally, you can currently only keep a maximum of $15,000 in your account, though Beam is planning on bumping that limit up to $50,000 in the future. While $15,000 may be enough for many people, if you’re working on building a robust emergency fund or saving up for a down payment on a house, it may not be enough.

It is handy that you can make an unlimited number of withdrawals from your Beam account, as compared to the standard monthly limit of six withdrawals that applies to most traditional savings accounts. However, if you’re still living paycheck to paycheck and you have difficulty keeping a budget, this feature might tempt you to raid your savings account to make ends meet.

Overall review of Beam

Beam offers a truly unique approach, and there’s a lot to like about it, though it’s still in early stages. We’d recommend Beam to people who are obsessed with optimizing their interest rate and are willing to log into their account on a daily basis to do so. If you think you have friends who will likely use the app it’s an even better opportunity, given the only way to permanently boost your interest rate is by referring friends who open and use a Beam account.

We wouldn’t recommend Beam to people who aren’t as interested in micro-managing their account to get the best rate. People who anticipate having a balance higher than $15,000 should probably pass on Beam, at least until that cap increases in the future.

But for what it does currently, Beam does offer a high earnings potential. You’ll have to work for it and deal with account limitations, of course, but for some it may be worth the extra hassle.