Storing money in a bank is a good idea to build wealth and keep your money safe. You don’t have to worry about forgetting where you put cash or a guest stealing it. You also get tons of great perks from a bank that you can’t get by stashing your money under the rug. While traditional banks have been around for centuries, fintech companies offering banking services through their partnerships with FDIC-insured banks have become more common. Current lets their users create savings and checking accounts.
Current has over 4 million account holders, but a large user base doesn’t guarantee legitimacy. Many financial institutions have larger user bases than Current, and those firms are legitimate, but FTX had over 5 million users at its peak. User bases and reviews provide some of the stories, but you can also glean insights from Current’s website and customer experiences. This analysis will shed light on where Current stands as an online banking solution.
About Current Bank
Current is an emerging fintech company founded in 2015 by Stuart Sopp. The online banking solution helps consumers improve their financial outcomes. Rather than stop at being a bank that stores cash, Current members benefit from the app’s spending insights that help them monitor expenses. Current also offers opportunities to grow wealth, such as a 4% annual percentage yield (APY) savings account and the ability to trade crypto from the Current mobile app. Current is headquartered at its Chelsea office in New York City.
A bank’s legitimacy comes down to several factors, such as how they treat customers and which features they provide. However, the ultimate benchmark of legitimacy is if the bank has FDIC insurance. This insurance policy protects up to $250,000 of your bank account’s funds in the event the bank goes solvent. Although Current is technically a fintech company, its partnership with Choice Financial Group provides members with FDIC insurance. If you create a bank account on Current’s platform and deposit money into it, those funds are protected by the federal government. It’s the same protection that traditional banks have.
What is a Financial Technology Company?
A financial technology company, also known as a fintech company, uses technology to enhance financial products and services. Traditional banks use fintech components in their companies, such as mobile apps that let you access your checking and savings accounts or make credit card payments on the go. Fintech services have reduced the necessity of brick-and-mortar banks. Instead of depositing a check at your local bank, you can take a picture of your check with your mobile banking app, and the funds will automatically go to your account. Current is one of many banking solutions that lets you take a picture of your check to transfer funds.
Fintech companies take the concept a step further. Many of these companies got started when the internet and other resources were already available. This distinction has allowed fintech companies to offer banking services without buying commercial properties. Current gives you access to bank accounts, debit cards, and other features you would expect at a traditional bank. However, since these fintech companies have lower overhead costs, they can pass their savings on to consumers. That’s why fintech companies can offer higher interest rates on savings accounts and be more generous if you overdraw your account.
Current vs. Traditional Banks
Traditional banks have more years of business, but these banks and Current provide the same promise. You can store your hard-earned money with Current and traditional banks and have FDIC insurance. Current and fintech companies like it are the underdogs in this story. Although Current has an impressive 4 million users, Bank of America has over 66 million users.
Underdogs have to offer better perks and features to make people give them a try. Advantages like high-yield savings accounts and better overdraft protection can help banks stand out. Low overhead makes it easier for fintech companies to offer these advantages. Although Bank of America has a larger customer base, the company also owns over 4,300 branches. That’s 4,300 commercial mortgage payments, property tax receipts, and enough staff and security to provide a good experience for in-person customers. Current and other fintech companies don’t have to worry about those expenses, but through partnerships with established banks, they can still provide FDIC protection to their users.
Are Fintechs Like Current a Better Banking Alternative?
Banking is a personal decision. Before swapping to the Current mobile app or another fintech company, each person should consider their present banking setup. Some people use traditional banks because they like the convenience of a brick-and-mortar location. They may have also developed friendships over the years with workers at the bank. Some people want in-person interactions instead of having to rely on the phone or email to reach customer service. Under these circumstances, a traditional bank may be the better choice.
However, if you rarely visit your bank and do most of your banking online, you could be missing out on a higher interest rate on your savings account, fewer fees, and more affordability. You can save money by doing your banking with a fintech company instead of a traditional bank. People who do more of their banking online may benefit from a full switch, while someone who does most of their banking at a branch may want to stick with a traditional bank.
And don’t worry about withdrawing money from a digital bank account. Current and other online banks let you deposit and withdraw cash at ATMs. In fact, Current has a network of 55,000 fee-free ATMs in their network through their partnership with Allpoint.
What are the Pros and Cons of Fintech Companies?
Fintech companies have a lot to offer, but they aren’t for everyone. Looking at both sides of the coin will help you weigh the pros and cons to determine if a fintech banking solution is right for you.
Pros of Fintech Companies
- Lower overhead translates into more money for consumers: Better savings rates and lower fees attract many people seeking a better banking experience.
- Features galore: Fintech companies offer a wide range of features for their users. These companies can also add new features quickly to enhance the user experience.
- More flexibility: Want a virtual debit card that you can use right away? Looking for a loan or credit card that doesn’t require a hard credit check? It’s easier to find those types of choices if you give fintech companies a try.
- Speed: Get quicker approval for loans, bank accounts, and other financial products when you use fintech companies. Each company is different, but most of them are faster than traditional banks.
- Save time: No more long drives to the local bank. You can do all of your banking from anywhere in the world.
Cons of Fintech Companies
- You don’t have physical branches: Some people can do without a local bank, but others want the reassurance that help is a short drive away.
- You need internet access: If you don’t have the internet, you can’t use fintech. While a financial institution’s online offerings won’t work either, at least you can visit them at a local branch. If you have internet and no issues with accessing it, fintech companies can be a viable solution for your banking experience.
- Less regulation in some cases: FTX reminded us of what can happen when regulation gets light. Check if a fintech company’s bank accounts are FDIC-insured (usually through a partnering bank) before depositing funds. Current happens to be FDIC insured through its partnership with Choice Financial Group.
Is Current Bank Legit?
Current Bank is legit. It’s FDIC-insured and offers great features for its users. Bank accounts offered on Current’s platform have the same protections as bank accounts offered by financial institutions. You can look at Current app reviews in Google Play and the App Store to see how users like the experience. Current has over 250,00 reviews in those app stores with an average rating of 4.6 stars.
How to Open an Account with Current
Current has been around for several years and offers great features for people considering a fintech banking solution. The company offers resources that can help consumers save and make money, such as their high-yield savings pods. It also provides FDIC insurance for your bank accounts, a critical protection you should look for before doing business with any bank. The company’s teen accounts also make it easy for teens to create bank accounts that combine independence with parental supervision.
If you want to get started with a Current account, you can visit their website or download their mobile app to open a bank account today.