What exactly is Financial Life?
We are a Financial Technology ("FinTech") company helping consumers save money with incredibly competitive rates. Financial Life is putting consumers behind the wheel of their savings, giving people the ability to earn by far and away the highest interest rate in the country while also keeping everything FDIC-insured.
Does that mean that Financial Life is a bank?
Good question! We are not a bank. Financial Life partners with regional banks to hold your deposits in FDIC-insured accounts.
Why would a bank work with Financial Life?
Banks constantly have a need to grow deposits in order to fund different lending (and other) initiatives, and this is true across the entire banking universe. As banks have seen their production grow, they have needed to grow deposits as well. Unfortunately, organic deposit growth doesn't always keep up with loan growth, and banks fill deposits through other means, one of which is buying deposits from other banks. This is expensive for the banks and creates some serious NIM compression, so any opportunity to replace wholesale deposits with core deposits is very much welcomed.
What? Less lingo, please.
Banks need to grow deposits and working with Financial Life gives them the opportunity to do that without taking on the cost of additional people or branches. Working with Financial Life also gives them the ability to replace super-expensive deposits.
Are there any fees?
Nope. We are committed to ensuring that there are no fees in our deposit accounts. In fact, if any fees are ever charged by our bank partners, we promise to pay them on our customer’s behalf.
How does Financial Life make money then?
Banks need to grow deposits and working with Financial Life allows them to do that without increasing the number of branches that they have (or by partaking in some other expensive way to grow deposits). Because of that, our partner banks have agreed to pay us a small fee.
What's the base rate?
As of February 1, 2019. our base rate is 2.20%.
How can Financial Life afford to pay a base rate like that?
Financial Life can offer higher rates because our digital accounts are not burdened with the costs of maintaining a physical branch network. We also have very strong relationships with our partner banks and have been very open in our discussions about what rates need to be in order to be compelling for our customers.
How can I increase my rate?
During our initial campaign, we will be offering higher incentives for helping get the word out about Financial Life. You'll earn one Rate Boost Reward for every direct referral (people that you get to sign up) and one Rate Boost Reward for every indirect referral (people that your referrals get to sign up).
What's a Rate Boost Reward?
One Rate Boost Reward is equal to a 0.01% six month increase.
How quickly can that add up?
Get it? Got it? Good.
How does the Rate Boost Reward work?
Rate Boost Rewards are implemented for six months at a time, up to a maximum rate of 6%. It is up to you when and how much Rate Boost Reward you would like to use.
Why would I not use all of my Rate Boost Rewards at once?
There are a couple of scenarios where you may not want to use all of your Rate Boost Rewards at once. Maybe you would prefer to pay off debt that has a higher interest rate first (e.g. credit card, personal loans, etc.) and you want to save your Rate Boost Rewards for a time when you can build your savings up a little more. Maybe you want to use half now and half later. The (Rate Boost Reward) world is your oyster - we're just here to help you navigate.
What if l earn more Rate Boost Rewards than the maximum rate?
Rate Boost Rewards are implemented at your discretion, so you choose how much and when to use them. This means that as soon as one Rate Boost Reward is used up (after six months), you can implement another one. But to actually answer the above question, if you get more than the maximum rate, you would be able to use those excess Rate Boost Rewards after the first set of Rate Boost Rewards are complete.
What's the minimum Rate Boost Reward that I can use?
There is no minimum!
How in the world can Financial Life make money if there are accounts with rates at 6%?
We'll give it to you straight. If you are earning 6% in your Financial Life account, we are losing money on your specific account. That being said, because Rate Boost Rewards are initially being earned for referral activity, we are viewing the extra cost as the cost of customer acquisition (e.g. rather than pay some big corporation or advertising agency a boatload of money, we would much rather pay you - our own customers - to help spread the word).
Do you need another account to open a Financial Life account?
Yes. The initial account deposit will need to come from an account at another bank.
Is Financial Life trying to be my only banking relationship?
Far from it! We are trying to help you save for the long haul - this means that we are not trying to set up a bank account that you'll use for paying bills, rent, dry cleaning, late night excursions, etc. We want you to save and not have to think too much about it. Financial Life should complement your existing bank account, not replace it.
Where is my money actually held?
We are working through the contracts with our bank partner as we speak (or as we write and you read). Once the agreements are finalized, signed and in place, we will give you all of the information that you could possibly want (mostly the bank’s name, FDIC information, and a way to confirm that there is a relationship with the bank). One thing we can tell you for sure is that we will not deposit a dollar without you being fully aware of and comfortable with where it’s going to be held.
Until then, we're going to have to ask that you sit tight for a little bit. We are only looking to partner with a well-capitalized financial institution (as defined by banking regulations).
Am I limited to just one account?
Customers may open more than one account. We believe that this is incredibly important for customers that want to set multiple savings goals and save specifically towards those separate goals (such as a down payment for a house, retirement, and a proper rainy day fund).
Will Rate Boost Rewards only be per account?
The opposite. Rate Boost Rewards are implemented on the customer level, meaning that you will have the same Rate Boost Reward level across all accounts - meaning that you will not use up Rate Boost Rewards on one This will help customers set multiple goals and save specifically towards those goals!
Are there any limits on account balances?
The initial maximum account balance will be $50,000. As we work through everything with our partner bank and we have a smooth process, we expect to raise that limit towards the FDIC-insurance limit of $250,000.
Who can join?
Any US citizen or US resident that is at least 18 years old
Still have a couple of stones left unturned? Please reach out to us!