Credit Karma to Offer the Credit Karma Savings Account
Credit Karma, a personal finance portal focused on providing individuals with access to credit scores, reports, monitoring and more, will soon be adding the Credit Karma Savings account to its portfolio of offerings.
Credit Karma Savings
Credit Karma Savings, its official name, will provide members a high-yield savings rate that will move competitively, helping savers to maximize the growth of their money.
In a recently published press release, Credit Karma founder and CEO, Ken Lin said, “We want to make savings accessible to every American in the same way we have with credit scores. We look forward to helping our members grow their money with Credit Karma Savings.”
While there are a number of high-yield savings accounts from which to pick when looking for a safe place to put your money, it appears Credit Karma Savings will operate a little differently than most.
According to the press release, Credit Karma Savings will “take advantage of a high-yield savings rate delivered through a network of more than 800 banks.”
So, unlike a high-yield savings account that is tied to a single financial institution, Credit Karma will utilize a competitive-like marketplace of banks to achieve an ever-evolving high-yield savings rate, moving money to achieve the highest rate available.
My primary concern with any high-yield product is safety. And with a new entrant like Credit Karma, delving into a somewhat unique savings structure, that concern is even more so.
However, the press release states, “This distributed deposit network approach provides members with FDIC insurance for up to $5 million.”
Which means the afforded protection of funds should be similar to what you’d find at your local neighborhood bank.
Setting Up an Account
Credit Karma Savings accounts are not yet available (as of 10/5/19).
Once the program/accounts become active, if you’re a member of Credit Karma, setting up a Credit Karma Savings account will be fairly easy, accomplished with only a few clicks according to the press release.
Additionally, there will be no fees and no minimum deposit requirements to open a Credit Karma Savings account.
While Credit Karma Savings is currently advertising a rate of 2.03% APY, rates are variable and will likely change regularly.
It’s the banking network approach that should allow for a generally higher than normal savings rate as compared to traditional savings account rates.
Current Traditional Savings Rates
The current national savings account interest rate according to the Federal Deposit Insurance Corporation (FDIC) is 0.09%.
And with the current interest rate environment – the Federal Reserve Bank lowering interest rates – don’t expect to see an increase in that pitiful rate any time soon.
A Move for Yield
So it’s a good idea to look to higher-yielding, safe, savings vehicles into which you can put some of your money.
High-yield, FDIC insured, savings accounts fit that bill.
And with Credit Karma introducing what appears to be a fairly easy-to-enter high-yield savings account for its members, you just might want to give it a look.
Obviously, the Credit Karma Savings account is not yet available for deposits.
Rest assured, we’ll keep on top of this new high-yield entrant to the savings community and let you know more details when they become available.
