What Kind of Bank Is Current and How Does It Work?

Current is a modern financial technology company that offers digital banking services. Founded in 2015, the company aims to provide an alternative to traditional banking by leveraging technology. It focuses on improving financial outcomes for its members by offering various services designed for a digital-first experience. Current has grown to serve millions of members across the United States.

Current’s Banking Model

Current operates as a financial technology (fintech) company, which means it is not a bank itself. Instead, it partners with regulated, FDIC-insured banks, such as Choice Financial Group and Cross River Bank, to provide banking services. This model is characteristic of “neobanks” or “challenger banks,” which are tech companies that offer banking services primarily through digital platforms, often emphasizing user experience and lower fees.

The partnership with FDIC-insured banks is important because it ensures that customer deposits are protected. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor in the event of a bank failure. This structure allows Current to offer banking functionalities while relying on the established regulatory framework and deposit insurance of its partner financial institutions.

Key Services and Features

Current offers a range of financial products and services designed to meet the needs of its users, accessible primarily through its mobile application. The platform provides spending accounts, which include a Visa debit card for everyday purchases. A notable feature is early direct deposit, allowing users to receive their paychecks up to two days earlier than traditional banks. This can provide financial flexibility and help users avoid late fees on bills.

For managing finances, Current incorporates budgeting tools like “Pods,” which enable users to set aside money for specific savings goals. The fee structure often emphasizes fee-free aspects, such as no monthly fees, no minimum balance requirements, and access to fee-free ATMs within certain networks. Another specific feature is the instant refund of gas holds, meaning funds temporarily held by gas stations are released back to the account immediately after a transaction.

Current also offers a secured Credit Builder Card, which helps users establish or improve their credit history without requiring a credit check or a minimum security deposit. This card reports to all three major credit bureaus and is designed to prevent debt accumulation as spending is limited to the funds available in the account. Additionally, Current provides specialized accounts for teens, giving them some financial independence under parental oversight.

How Current Operates

Current primarily operates as a mobile-first, app-based platform, meaning users manage their accounts and conduct transactions through a smartphone application. This digital-only approach eliminates the need for physical branches, which can contribute to lower operating costs and, in turn, allows Current to offer reduced or no fees to its customers. The entire account opening process is digital, typically completed through the mobile app.

For cash deposits, since there are no physical branches, Current facilitates this through partnerships with third-party retail networks. Users can deposit cash at over 60,000 participating stores nationwide, including major chains, by generating a barcode in the Current app for the cashier to scan. A small fee, typically around $3.50, is charged per cash deposit transaction, with daily limits of up to $1,000 and monthly limits of up to $10,000. Customer support is primarily handled through online channels, reflecting the digital nature of the service.

Security and Regulatory Compliance

Security and regulatory compliance are important aspects of Current’s operations, particularly given its digital banking model. The primary layer of security for user funds is the Federal Deposit Insurance Corporation (FDIC) insurance, provided through Current’s partner banks.

Beyond FDIC insurance, Current employs various security measures to protect user data and transactions. These measures typically include encryption to secure data, fraud monitoring systems to detect suspicious activity, and multi-factor authentication protocols to verify user identity during login and transactions. Regular security audits and the implementation of strong access controls are also common practices to safeguard sensitive information. The partner banks that hold customer funds are subject to regulatory oversight, which further contributes to the overall security framework.