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Eco savings review

This crypto startup advertises up to 5% APY on your deposit, though without FDIC insurance.

Eco is a crypto savings account that earns up to 5% APY on deposits, though with a catch: You must refer five friends. Otherwise, you earn 2.5% APY — still higher than your local bank, but low compared to other crypto savings accounts.

Standout features of Eco:

  • Deposits and withdrawals in US dollars
  • Standard 2.5% APY and up to 5% APY with five referrals
  • 5% cashback program at limited retailers

2.50%

APY

$0

Fee

Details

Annual percentage yield (APY)2.50% on balances of $0+ 5% APY if you make five referrals
Fee$0
Minimum balance to earn interest$100
Interest compoundingMonthly

What we think

Eco is best for cryptocurrency beginners, because it requires no prior knowledge or experience with crypto to use it. Crypto transactions occur behind the scenes, leaving you to deposit and withdraw in US dollars as you would with a traditional account.

With each account deposit, Eco automatically converts your US dollars into the stablecoin US Dollar Coin (USDC), which is pegged to the US dollar, reducing the volatility you typically find with cryptocurrency. Eco then lends out your USDC to regulated financial institutions that pay set rates, passing along a percentage of what they collect to you in the form of an APY.

The account earns a standard 2.5% APY or 5% APY when five referred friends open an Eco account and deposit at least $100. This rate is much higher than traditional savings accounts, which earn an average of 0.06% APY.

Compared to similar stablecoin-based crypto savings accounts, you may be able to earn the same or a higher APY without a referral requirement. For example, Monie earns up to 5% APY without this requirement.

If you’re looking for an account that allows you to deposit crypto, you could earn higher interest. Accounts like CoinLoan and YouHodler pay upward of 10% APY, though you may be required to stake or loan crypto to earn the maximum interest rate.

Eco also offers a 5% cashback program, but it’s supported by only five retailers. To earn cash back, you must purchase nonrefundable virtual gift cards using the Eco app. You can earn Eco points when you save, spend or make referrals, but these points currently don’t offer any real value. We spoke to customer support, who told us that while the points are for “experimental purposes,” there may be an added benefit to them in the near future.

How to apply for Eco

Eco is in limited release, so you may not be able to open an account yet. To determine your eligibility, complete a form on Eco‘s website.

  1. Go to the provider’s site and follow the steps to apply.
  2. Enter your email address and select Sign up.
  3. Enter your name and phone number, and optionally enter your Twitter handle and LinkedIn URL.
  4. Answer a multiple-choice question about the best use for a seed.
  5. State whether you live in the US and, if you do, which state you live in.
  6. Finally, state whether you use an Android device or an iPhone.
Eco will let you know if your application is approved. If you’re added to the wait list instead, you’ll receive a text message when Eco officially launches.

Eligibility

Eco isn’t available to residents of Hawaii, Texas, New York, Connecticut, New Hampshire, Virginia or Vermont.

Eligibility is open to those who are:

  • At least 18 years old
  • US residents

Required information

To open an account, you must provide personal identifiable information that includes:

  • Full name
  • Date of birth
  • Email address
  • Phone number
  • Physical address
  • Government-issued ID, such as a driver’s license or passport
  • Proof of address, such as a utility bill issued within the past 90 days
  • Social Security number

5 benefits of Eco

Eco offers benefits that include:

  1. $0 fees. You won’t pay fees of any kind with this account.
  2. Up to 5% APY. Your deposits earn 2.5% APY plus 0.5% APY — or up to 5% — for each referral who deposits at least $100 into their account.
  3. No crypto learning curve. All crypto transactions happen in the background.
  4. Up to 5% cash back. Earn rewards when you buy from Uber, Uber Eats, DoorDash, Amazon and Instacart. But you must first use the Eco app to purchase a virtual gift card for the exact amount, and purchases are nonrefundable.
  5. Transparency. Compared to crypto savings accounts like Linus, Eco‘s website is refreshingly transparent about how it’s able to pay such high APYs.

How to earn the highest interest rate with Eco

Earning the 5% APY is a two-step process:

  • You must refer five people to join Eco.
  • Each of your referrals must deposit at least $$100.

If you don’t make any successful referrals, your account earns 2.5% APY. For each referral who deposits at least $100, you earn an additional 0.5% APY — up to 5.0%.

3 drawbacks of Eco

Like other crypto savings accounts, deposits with Eco aren’t insured by the FDIC or any other regulatory body, among other potential drawbacks.

  1. Eco points don’t hold value. You earn 16 Eco points for every $1 earned in interest, up to 1.5 points for every $1 spent, 160 points for referrals, up to 0.4 points for paying bills and up to 1.5 points when you spend. But as we learned from a customer service rep, these points have no value for now.
  2. Interest paid monthly. You might not mind that your balance compounds daily and is paid monthly, like a traditional bank account. But many crypto savings accounts pay interest weekly — or even daily, like Nexo, Yield and Gemini Earn.
  3. Limited support. Help is available by email, Twitter or snail mail only.

Is Eco safe to use?

Eco‘s advertising makes it clear it’s not a bank, and it makes that sound like a positive thing. However, because it’s not a bank, your account isn’t insured by the FDIC, SIPC or any other regulatory body.

This isn’t the same as fintech companies offering digital bank accounts because they partner with actual banks that hold your money and provide FDIC insurance up to $250,000. But in the case of Eco, the third-party provider holding your funds is not a bank and if that provider were hit with theft or a security breach, you could lose some or all of your money. However, a support article on Eco‘s website explains that the provider insures your funds against theft and security breaches.

We contacted a representative from Eco who confirmed that if a breach were to occur, your funds would be protected. But the representative wasn’t aware of what the insured limit is, which may provide room for pause as other crypto savings accounts like Nexo, clearly state how much would be covered by their third-party provider.

Eco is backed by a large group of investors that includes celebrities and athletes like Sean Combs, Kevin Durant, Carmelo Anthony and Tiffany Haddish. This may put your mind at ease if you’re anxious about risk.

How does Eco compare to a traditional savings account?

Although Eco leverages cryptocurrency to offer high APYs, the account operates much like a traditional savings account. For instance, you deposit and withdraw US dollars, linking an external checking or savings account.

But unlike traditional savings accounts, Eco isn’t insured by the FDIC or other regulatory body.

Name Product Annual percentage yield (APY) Fee Minimum deposit to open
Aspiration Spend & Save Account
Finder Rating: 4.2 / 5: ★★★★★
Aspiration Spend & Save Account
5.00%
$0 per month or $7.99 per month for Aspiration Plus ($5.99 per month if you pay annually)
$10
Deposits are fossil fuel-free. A spend and save combo account with unlimited cash back rewards and deposits insured by the FDIC and a $100 bonus when you spend $1,000 in your first 60 days.
Quontic Bank High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
Quontic Bank High Yield Savings
0.55%
$0
$100
Interest is compounded daily. No monthly service fees. Competitive rates
Axos Bank High Yield Savings
Finder Rating: 4 / 5: ★★★★★
Axos Bank High Yield Savings
0.61%
0.25%
0.15%
$0
$250
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
American Express® High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
American Express® High Yield Savings
0.50%
$0
$0
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
Gemini Earn
Gemini Earn
Up to 8.05%
$0
$0
Watch your cryptocurrency earn up to 8.05% APY with this nationwide account. Not FDIC insured.
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How do I deposit or withdraw my money?

You can’t access your money at ATMs or write checks from your account, though Eco‘s website says that it may support wire transfers or virtual currency transfers in the future.

Funding options

  • Incoming ACH transfer. Initiate a transfer from a linked checking or savings account.
  • Direct deposit. Deposit some or all of your paycheck.

Withdraw options

  • Outgoing ACH transfer. Transfer funds to a linked checking or savings account.
  • Eco payments. Pay for purchases from Uber, UberEats, DoorDash, Amazon and Instacart directly from your Eco balance.

How to contact Eco

Get help in three ways:

  • Email support@eco.com.
  • Send a Tweet to @eco.
  • Mail a letter to 2261 Market Street #4348, San Francisco, CA 94114.

Disclosure: The writer owns a range of cryptocurrency that includes USDC and BTC.

Disclaimer: This information is not financial advice or an endorsement of cryptocurrency or any specific provider, service or offering. Cryptocurrencies are highly volatile and high risk. Do your own research and seek financial advice before buying. And make sure the provider you're interested in is available in your state.

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