Empower Online Banking Review | The Good, The Bad, The Truth
Jan 11, 2021
Empower Online Banking Review
The Empower bank account is the new kid on the personal finance block. I follow a few personal finance influencers on Instagram and many of them have been so excited to share Empower with their followers.
I heard all the good buzz words like "free", "no fees", and "no minimum deposit". I was almost sold. I went to the app store and pulled up the app and realized I needed to take another look at this. Empower makes it super simple to open an account, but we need to know what happens when that account is opened. Let's go over the good, the bad, and the hidden benefits of the Empower online bank.
Monthly Fee And Interest Earned
I first found out that checking accounts paid out interest to account holders in 2020. I had no idea before then. Thankfully, my husband had an account that paid him interest and I joined the account when we got married.
So, the Empower checking account has an APY of 0.20% as of Jan. 1 2021. If you are in one of the people like me who don't get paid interest, then this is a good bonus, but there are accounts that pay more.
However here's the kicker, Empower charges $8 a month which starts after 14 days. I'm not about that. That's like paying upfront for the fees they say are "free", but let's keep looking at the features.
No Overdraft Fees
Simply put, I love this benefit. First of all, as someone who is about her money, I don't turn overdraft protection on my bank accounts. If I don't have money in my bank account then I don't need to buy anything-but that's not what this is about.
However, I know many people keep overdraft protection turned on "just in case" and if you do need it, you usually pay for it. Not with Empower.
This is a good benefit, but if you find yourself getting hit with the overdraft charges, then you should find the triggers that lead to you spending more than you make.
ATM Fee Reimbursement
The last time I used an ATM I was at the Florida State Fair and some of the vendors did not accept cash. That was the most expensive withdrawal ever. I was charged by the ATM $4.25 to make the withdrawal, then I was charged about $2 from my bank since I used that ATM.
With Empower, say goodbye to those fees.
Standard Benefits
- FDIC insured up to $250,000
- Visa zero liability insurance
- Freeze your debit card in the app
- 24/7 spending alerts
These are benefits listed on the Empower site and while they are great benefits, they are run of the mill for bank accounts today.
Instant, No-Fee Cash Advance
A cash advance is a many times used as short-term loan that helps to hold you over until your next payday. Many times, they have expensive fees. Not with Empower. You may qualify for free cash advances up to $250 with no fees.
This is great if you are in a bind. Just like my thoughts on overdraft fees, if you find yourself using this benefit each month or even every couple of months, you may need to evaluate your spending habits to break the cycle.
Overall Thoughts And Recommendations
Empower understands what many traditional banks are missing. The emphasis on low or zero fees is a great benefit for this account.
However, I would not recommend it.
First, none of the benefits are worth an $8 per month subscription fee to have the account. I bank with Baxter Credit Union (I am not an affiliate, just a happy customer) and I get 2% cashback on my checking account, no maintenance fees, and all ATM fees are reimbursed.
Second, while I have not found another account that will provide free cash advances, I want to promote healthy spending habits. With healthy spending habits you won't need to worry about overdraft charges or needing a cash advance.
If an emergency comes up, you'll be happy you didn't dig yourself into a hole.
If you need help budgeting, check out my favorite budgeting software, YNAB (You Need A Budget). (This is an affiliate link.)
You can get 3 of my go to meal ideas right to your email address. Download the recipes by clicking the button below.
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