US credit scoring outfit Credit Karma is launching its first financial product, offering its 100 million members the opportunity to open a high-yield savings account with the firm.
Because existing members have already shared their financial picture with Credit Karma, signing up is seamless with minimal clicks to open an account. There are no fees and no minimums to open. Users will be able to watch their savings grow directly within the app, which will offer an initial rate of 2.03%.
Credit Karma is relying on its network of 800 member banks to search for and switch to those offering the most competitive rates.
“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,” saysd Jagjit Chawla, general manager of Savings and Tax for Credit Karma. “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.”
Credit Karma is not becoming a bank. Instead, the Credit Karma platform facilitates the opening and managing of accounts, where savings are housed and insured to the tune of $5 million through FDIC-licenced partner MVB Bank.