The Eco app is catching the eye of users looking for alternatives to traditional banking and has the backing of some celebrities.
Here’s everything you need to know about the Eco app.
- Eco is not a credit or debit card but is designed to replace both.
- The company notes that it also isn’t a bank.
- Instead, it’s a storage solution for people’s money.
- This allows it to lend out money much like banks and lets users gain interest from it.
- However, unlike banks, the APR at Eco is much higher.
- The Eco app allows for APR that ranges between 2.5% and 5%.
- For comparison, the average savings account only offers an APR of .07%.
- Eco says that it can support that higher APR thanks to cutting out the middle man.
- This means users’ money moves through fewer places and won’t face any many cuts.
- It also offers a reward system that isn’t fully fleshed out yet.
- Eco Points are given to users when they spend and act as pseudo crypto for the app.
- Several groups have joined in to fund the company and it’s raised 35 million so far.
- A funding round earlier this year brought in $26 million of that.
- Some of the celebrities that invested in the Eco app include Diddy, Tiffany Haddish, Larry Fitzgerald, Kelvin Beachum Jr., 3LAU, and Keisuke Honda.
- It’s also worth pointing out that Garrett Camp serves on the Board of Directors at Eco.
- Camp is one of the co-founders of Uber (NYSE:UBER) and continues to sit on that company’s Board.
- One thing that might scare some users away from the Eco app is a lack of insurance.
- There’s no FDIC insurance for money held in the app.
- However, company CEO Andy Bromberg argues that this shouldn’t be a concern.
- He points to the idea that a bank crash means people would only get the lost value of that money back.
- It doesn’t take into account the lost funds from inflation and the low APR that banks offer.
- The Eco app is still in its early phase.
- As such, there’s still a waitlist for users.
- Even so, those interested can sign up online to be put on that list.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.