What is Rewards Banking?
Savings accounts that give you rewards points, Hello 2020.
Summary: Rewards banking involves providing savers/depositors with real rewards (subscription boxes, streaming services, hotels nights, flights, grocery delivery, etc) to promote long term saving and immediate benefits, instead of pennies/low APYs.
Although I don’t think anyone is keeping track, it may be fair to say that banking has never been a fun experience. It appears that the large banking options (JP Fargo of Americas, to not call anyone out specifically, cough cough), just figured out that people actually care about trying to retire someday soon and that their websites and product offerings are as old as most of their executives (real old).
Even after figuring this out, they still have left millennials (or all depositors/customers for that matter) with really old websites & apps and even worse customer service and deposit rates (if they even pay interest on deposits).
To best understand “rewards banking”, we need to do a quick run-through of what classic banking looks like.
You use the bank your parents told you to use. You open a checking and savings account. You get hit with an endless array of fees every year. You receive an annual statement showing that you earned $0.25 in interest this year (so low in fact, the IRS doesn’t even require you to report it) and then you get hit with a fee for receiving the statement in a paper format. On top of all of this, you had the privilege of using a very old website that constantly attempts to sell you on other products (investments, loans, CDs).
Sounds great, right? Wrong.
And I can probably guess that this narrative applies to the majority of Americans today (as made evident by the fact that these banks hold trillions in deposits).
So enter rewards banking.
Getting right to the point, with rewards banking you earn subscription boxes, streaming services, hotel nights, flights, and pretty much just about anything else that would make your life better NOW, just for doing what you are already doing (saving money). Here’s a look at a few of Froogal.us rewards offerings:
No more statements that show that you earned pennies. Only amazing rewards (gifts, dare I say) every month sent right to you.
How do you earn these rewards?
You save money with a rewards banking platform (Froogal.us is currently the only FinTech offering this so the choice should be simple). As you continue to grow your savings, you accrue additional rewards points EVERY DAY. Points can be redeemed any time and never expire (only on Froogal).
What kind of rewards do “rewards banks” have again?
Well, certainly not just boring banking products. Rewards banking is about making your life better immediately while you grow your savings for the long-term (aka — retire EARLY). Essentially, you can actually retire one day and enjoy the ride with gifts every month.
Rewards, at least on Froogal, are focused on 3 areas:
- Travel (hotels, flights, etc)
- Pets (toys, clothes, food, daycare, etc)
- Fitness (gear, supplements, gym memberships)
Does it cost anything to use these “rewards banks”?
Absolutely not (at least with Froogal). They are set up to be completely free and safe (fully FDIC-insured up to applicable limits).
Who is currently offering “rewards banking”?
Currently, only Froogal (www.froogal.us). Although, it is expected that many FinTechs and digital banks will follow suit with reduced/clunky knock offs during 2020.
If you are a young millennial who is fed up with being f*cked by large banks, make the switch today. Life gets better immediately.