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Current: The fintech company offering a 4% APY on up to $6,000 worth of savings
Select takes a look at Current, a fintech company that offers savings pods with a 4% interest rate.
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With inflation at a record-high level of 8.3%, consumers hoping to earn more on their deposits should consider stowing their money in places besides traditional checking or savings accounts. A new financial technology company, Current, is offering consumers an annual percentage yield, or APY, of 4.00% on up to $6,000 worth of savings, surpassing the interest rates offered by many traditional banks.
In contrast, the average annual percentage yield on a traditional savings account is a measly 0.13%, according to Depositaccounts.com. While a Current account doesn't have an APY that keeps pace with the inflation rate, it still provides one that is more than 30 times the average on traditional savings accounts.
Below, Select looks into Current's many features to help you figure out whether it's a good fit for your financial needs.
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What is Current?
The financial technology company was founded in 2015 by former Morgan Stanley foreign exchange trader Stuart Sopp. Current provides an entirely online banking service, offering several products — a debit card and a bank account in addition to various budgeting tools — through an app, which is available via the App store and Google Play.
The company's primary product, however, is its bank account and savings pods, which are free for consumers. Note that Current does not perform a credit check when you apply, but instead uses your social security number to verify your identity.
Those who sign up for Current are given an account and three virtual savings pods. Each savings pod earns a 4% APY and can hold up to $2,000. In this case, the annual percentage yield refers to the interest a consumer can earn over the course of a year. Interest payments are paid out daily and are deposited directly into your account.
Annual Percentage Yield (APY)
4.00% APY on up to $6,000 ($2,000 in each Savings Pod)
There are no minimum balance restrictions to participate in the Current Interest feature, but you will only earn Current Interest on any amount over $0.01 in your Savings Pod.
For round-Up transfers from Current account to Savings Pod and online transfers from spending account to Savings Pod, there's no limit to the number of times per day and no maximum dollar limit.
With Overdrive™, overdraft up to $200 without any overdraft fees. See terms.
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- Offers a higher APY in Savings Pods than most high-yield savings accounts offer
- No monthly fees
- Can only earn interest on up to $2000 per Savings Pod
If you're interested in maximizing the amount of interest you can receive from Current, you'll want to deposit $2,000 in each of your savings pods to ensure you earn $240 in interest over the year.
Even popular high-yield savings accounts don't offer interest rates as high as 4%. For example, Marcus by Goldman Sachs and Ally Online Savings Account, both of which Select ranked among the best high-yield savings accounts, only provide a 0.60% APY as of press time. You'd need to put $40,000 in an account with a 0.60% APY to earn the same $240 you'd earn from Current's 4% APY on $6,000.
While consumers are typically restricted to making six withdrawals per month or per statement cycle with high-yield saving accounts through Regulation D, the Federal Reserve has temporarily lifted this restriction due to the Covid-19 pandemic. Since Current is not technically considered to be a savings account, however, it is not subject to the confines of Regulation D either way.
With Current, customers only need to transfer money from their savings pods to their spending balance in order to access it. They're also able to make unlimited withdrawals from that balance.
Current is FDIC insured up to $250,000 through Choice Financial Group, Member FDIC.
What features does Current offer?
A number of features, such as round-up, Overdrive™ and faster direct deposit, are available through Current. Round-up works similarly to apps like Digit or Acorns, which automatically round-up your purchases to the nearest dollar and allocate the difference toward your various savings goals, in this case by placing the money in a savings pod or giving pod.
Current also offers what it calls giving pods through its teen accounts, allowing teens to donate funds to an organization of their choice instead of saving for their individual goals via savings pods. Teen accounts include the app as well as a debit card. Parents can transfer money into these accounts, monitor retailers their teens are shopping with, block certain merchants and set spending limits.
Regular Current accounts also come with a Visa Debit card, which provides rewards — in the form of Current points — with select retailers. You can earn up to 15X Current points at brands such as Family Dollar, 7-11, Subway and KFC, among others. Current points can be redeemed in the Current Shop, although the company does not publicly disclose which items are available through it.
Since Current is an entirely online fintech service, customers won't be able to go into brick-and-mortar locations to withdraw or deposit their money. If you want to withdraw money without paying fees, you'll have to find an Allpoint® ATM — you can use the app to locate available ATMs within your vicinity. If you don't use an Allpoint ATM, you'll have to cough up an extra $2.50 in fees in addition to the ATM operator charge.
Current has no overdraft fees and you won't need to meet any minimum balance or minimum deposit requirements in order to open an account.
Another benefit of Current is faster and easier access to liquidity. Current account members can get their paycheck up to two days earlier, while qualified members are able to overdraft up to $200 without paying overdraft fees — this particular perk starts with users being allowed to overdraft $25 and may be increased based on a variety of factors.
Current is a good choice for consumers looking to earn some extra cash on their deposits. While you're only able to save up to $6,000 in total ($2,000 per savings pod) with the 4% APY, this interest rate stands out in comparison to others currently being offered on both high-yield savings accounts and traditional savings and checking accounts.
While Current's other offerings, such as its debit card and faster direct deposit feature, can be useful to help you rack up rewards or let you receive your paycheck earlier, the real value in having an account is the interest you'll earn from your savings pods. Current doesn't disclose much about which retailers you'll be able to earn points with or what you can redeem points for, so if you're looking to earn rewards, you might be better off opting for a cash-back or travel credit card with a more transparent program.
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