Credit Karma, a company that enables people to gain access to their credit scores, is launching a high-yield savings account that customers can use through an app and online.
CNBC reports that the savings account won’t have any fees and will not require a minimum balance to open. It offers a savings rate of 2.03 percent APY, which is about 22 times higher than the average of national accounts.
“The thought of opening a new account or downloading another app can feel overwhelming – and we know inertia is one of the biggest barriers to financial progress. When we built Credit Karma Savings, we wanted to develop a product that made opening a savings account as easy as possible for our members,” said Jagjit Chawla, general manager of savings and tax for Credit Karma, in a release. “We’re also making it possible for members to see the power of high-yield savings with our savings simulator, which shows how your money could grow over time.”
The new savings feature will be available on Oct. 28.
“We want to make savings accessible to every American in the same way we have with credit scores,” Credit Karma Founder and CEO Ken Lin said in a statement. “We spent the first 12 years focusing on helping Americans manage their debt. With more than 100 million members around the globe, it made sense for us to jump across the balance sheet with Credit Karma Savings.”
Credit Karma is partnering with West Virginia-based MVB Bank on the venture. The bank will handle the funds and will offer FDIC protection up to $5 million. Credit Karma said it is using technology to give people the best APYs.
Although Credit Karma’s APY is high, it’s not the best on the market. Vio, an online bank, has an account that pays 2.42 percent, with a $100 minimum balance to open.