Banks can generate your credit score within seconds. You can take out a loan with a ten minute application. Credit card applications can take mere seconds. And even investing can be totally automated when you use a platform like M1 Finance.Despite the massive changes to the financial institutions over the past five to ten years, some financial tasks remain annoying. One of the most difficult is automating savings. It takes a lot of effort to automatically move money from one account to another.While I can’t say why this sort of automation is so difficult, I can say that Astra Finance has created a tool that I genuinely recommend for people with savings goals. Here’s what you need to know about the app.
Astra Finance is an app that allows users to automatically save money. It transfers money from any checking account you own to any savings account you own. Users can set up “savings” routines directly in the app. For example, you might set a routine that transfers $100 per month into your high yield savings account. You might call this routine “Vacation” or “Adult furniture” or whatever motivates you.If you share a joint checking account with a partner, you can automate a routine to put your part of the shared expenses into the account each time a paycheck hits.But the savings routines aren’t just set dollar amounts. You can save a percentage of income (say 10% of your take home pay) in a high yield savings account. Users can also choose round up routines, a 52 week challenge (growing your savings amount every week of the year) and “sweeps” which involve an algorithm picking the amount of money you’re unlikely to miss and sweeping it to savings.Users can transfer up to $1,000 between accounts at any one time, and transfers can be selected as one time only.
Astra Finance is completely free for users.Note: it will not reimburse you if you incur overdraft or other fees due to its automated routines. However, most of the time the ACH transfers will not be allowed if you’re out of money in one account.
It is not clear how Astra Finance makes money today. The company has given some indication that they may add more bank-like features such as debit cards. If that happens, the company may earn money from transaction fees or earn interest off of deposits.
Astra is not a replacement for any financial products. You’ll still need a checking account, a high-yield savings account, investment accounts, and perhaps a credit card or two. Astra will simply make it very easy to transfer money between checking and savings, even if those accounts are held at different institutions.Automating savings has been hugely beneficial for me. Without automated savings in place, we never seemed to prioritize mid-term goals such as vacations, or fun big ticket items (like new snowboards and annual passes). By implementing savings routines, we save several hundred dollars each month towards these goals that we really value.If you’re not currently saving for short-term or mid-term goals, Astra could help you build that savings without having to focus too much on will power. It will run your savings routines in the background.
There are three possible drawbacks to Astra.First, it cannot connect to PayPal. That’s not a huge deal for most people. But I know many people who use PayPal as their preferred method of reimbursement among roommates or housemates. Since Astra doesn’t connect to PayPal, roomates cannot use Astra to automate a rent payment.Astra’s second shortcoming is that transfers are currently limited to checking and savings accounts. Users cannot set up transfers to investment accounts, retirement accounts, or to automate debt payments. Those features may come in time, but it isn’t part of the core product.The last drawback has to do with Astra’s user interface. Astra seems to be pretty good at actually executing ACH transfers between banks. However, it struggles to keep all the banks connected in the app itself. If you try to use Astra like Mint (where you can see all your accounts in one place), you’ll be disappointed.
If you’re happy with your current savings activities, you may not need Astra. There’s no reason to over-complicate your financial life.However, if you struggle to stay on track with savings goals, Astra Finance could really help you out. It can help you automate your savings, so you don’t have to rely on will power. Plus, you should also see how it compares to the other top automatic savings apps that already exist.With savings happening in the background, you can feel the freedom to spend the money in your checking account without having to budget every cent.