How fintech is beating credit unions at their own game
Credit unions talk a big game about teaching members good financial behaviors, but fintech is eating the movement’s lunch when it comes to helping consumers save money.
One of the leaders in that effort is Acorns, an app that connects to a user’s credit or debit cards and rounds up purchases to the next dollar, holding the accumulated difference in escrow and investing it with a risk portfolio determined by the user. The service costs just $1 per month for balances of less than $5,000 and users can withdraw their funds at any time.
As of about 2015, said Karim Habib, director of lending solutions at CUNA Mutual Group, Acorns – to say nothing of other fintechs offering similar services – had 650,000 members (many of them millennials) with a combined savings of approximately $25 million. Acorns officials did not respond to CU Journal’s request for updated statistics.
Round-up savings isn’t a new idea – Bank of America has offered its Keep the Change feature for more than a decade, rounding up every debit card purchase to the next dollar and depositing the difference into a savings account cost-free – yet the vast majority of credit unions haven’t embraced the concept.
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