Affirm Joins The High-Yield Savings Account Crowd

Affirm, a company founded by entrepreneur Max Levchin to provide fair alternative credit, has launched a new free saving account that offers a 2 percent annual interest rate. The move comes amid other such recent offers in the finance world.

“As part of making good on our mission to provide honest financial products that improve lives, Affirm is constantly exploring ways to test and pilot new features and offerings,” Levchin said. “Based on user feedback and strong consumer interest, we’re working on a pilot that gives existing Affirm users the ability to put money into a savings account via our app. We are taking a thoughtful approach and are excited to get user feedback on the experience when the time is right.”

Earlier this month, Goldman Sachs said it has boosted interest rates for Marcus savings accounts, paying online savings account customers a 2.25 percent rate starting on Jan. 4, which is an increase of 20 basis points. Also, the rate on a one-year certificate of deposit is up 10 basis points, rising to 2.75 percent.

Late last year, though, Robinhood, the FinTech that garnered a lot of attention after announcing a checking and savings product with 3 percent interest, retreated from that. Shortly after Robinhood launched the product, questions arose about how the money would be insured and if it would be protected like a bank account that has the backing of the Federal Deposit Insurance Corporation. A bipartisan group of U.S. senators has since raised concerns that Robinhood is not being transparent about its cash management service.

In a PYMNTS interview with Karen Webster in December, Affirm’s Levchin talked in depth about his views of consumer finance and lending. Levchin said it’s time to change the conversation about credit in this country. Instead of one about whether credit is bad or good and whether consumers should or shouldn’t use it, the conversation should shift to one about choice — the choice between using credit products that help consumers take control of their financial lives versus using those that can cause consumers to feel out of control.