Aeldra believes that U.S.-bound Indian students deserve to open a zero fee U.S. bank account pre-departure.
What is Aeldra?
Aeldra Financial, Inc. is a Silicon Valley-based corporation providing access to banking and investment services in partnership with regulated U.S. financial institutions. The Company was incorporated in 2019 and had thousands of customers from the U.S. and overseas, primarily India.
Blue Ridge Bank, N.A. (“Blue Ridge”) is Aeldra’s banking partner. Blue Ridge is a U.S. bank headquartered in Virginia and founded in 1893. It is a National Bank regulated by the Office of the Comptroller of the Currency (OCC), an independent bureau within the United States Department of the Treasury. Blue Ridge’s holding company Blue Ridge Bankshares, Inc. is listed on the NYSE as BRBS.
All Aeldra customers’ funds, i.e., all funds that customers keep in their Aeldra U.S. Student Bank Account, are held by Blue Ridge, a Member of the Federal Deposit Insurance Corporation, a U.S. Government entity. The FDIC – short for Federal Deposit Insurance Corporation – is an independent agency of the United States government that protects against the loss of insured deposits if an FDIC-insured bank fails. It is backed by the full faith and credit of the United States government. Since the FDIC began in 1934, no depositor has ever lost a penny of FDIC-insured funds. All funds in the Aeldra account are insured up to $250,000 per depositor through Blue Ridge.
Aeldra collaborates with Mastercard to provide a Global Debit Card linked to the account with unique benefits for overseas citizens and international travelers.
The idea behind Aeldra
Aeldra’s three Founders graduated from the Indian Institute of Management, Bangalore in 1999, and have worked across four continents. They have been senior executives in global organizations like McKinsey, Goldman Sachs, Accenture, Infosys, and Cargill.
Aeldra’s CEO, Sukeert Shanker, has led the launch of two new digital banks in the last six years, including Marcus by Goldman Sachs. Before setting up Aeldra, Mr. Shanker was Chief Operating Officer of the Digital Bank of East West Bancorp, Inc., a $45 Billion (Rs. 330,000 Crores) U.S. bank based in Los Angeles and listed on NASDAQ. Anil Kumar N.S., Aeldra’s India M.D., was part of the founding team at UIDAI. The Unique Identification Authority of India (UIDAI) is a statutory authority established by the Government of India to issue Unique Identification numbers (UID), named “Aadhaar,” to all residents of India.
Aeldra’s Mission is to provide customers banking that they can trust. The Founders have experienced the challenges that customers face in cross-border banking first-hand. They are driven by the core belief that customers should not have to jump through hoops or pay fees to access banking services.
Given the complexity of banking regulations within the U.S. and overseas markets like India, Mr. Shanker and Mr. Kumar’s deep expertise in regulatory and compliance aspects of banking is the primary reason Aeldra could create its unique business model.
What makes Aeldra different from other Traditional U.S. Student Banking Accounts?
Traditional U.S. banks like Bank of America and Chase offer student bank accounts that typically incur fees and offer little to no benefits to student customers. Usually, conventional U.S. student bank accounts have an account opening fee of $25 and a monthly fee of up to $6. Besides, they would also provide Overdraft facilities, allowing students to dip into credit on their bank accounts by negative balance. However, these banks also impose a fee of up to $35 on each overdraft availed.
Student bank accounts offered by traditional U.S. banks are plain vanilla accounts that do not bear any interest. These banks also impose a flat fee of upwards of $15 on each incoming international wire transfer into the account. Suppose students attempt to use their conventional student bank accounts outside the U.S. In that case, they are typically charged a foreign currency markup of up to 4% on each transaction (similar markup to Forex cards issued by Indian banks). Additionally, students attempting to use traditional U.S. bank debit cards at non-bank ATMs are charged a flat fee of $2.50 per transaction.
Aeldra accounts have zero fees for students
In contrast, Aeldra U.S. Student Bank Account has zero fees for students – there is no account opening or monthly fee and no minimum balance requirement. Aeldra also does not have any Overdraft fees and pays interest up to 2.02% APY* on student bank accounts instead. Incoming international wire transfers are free of charge at Aeldra – there are also no limits on the frequency or value of such transactions. Additionally, one can use the Aeldra Global Mastercard debit card outside the U.S. with zero foreign currency markup fees. Students can also use any Mastercard, Maestro or Cirrus branded ATM without incurring any costs.
An Indian student can save up to $500 per year with an Aeldra U.S. Student Bank Account. This is in contrast to a traditional U.S. bank account, given the above differences.
Benefits of Aeldra
- Pre-departure U.S. Bank Account opening with just India passport – no SSN, visa, or U.S. address required
- Zero fees – no account opening or monthly fees, no minimum balance required
- Free incoming international wire transfers
- Zero foreign currency markup on Global Mastercard Debit Card
- Earn up to 2.02% APY* on deposits + benefit from USD appreciation vs. INR
How does Aeldra offer zero fees on U.S. banking?
Aeldra offers zero-fee banking – no account opening or monthly fees, no minimum balance requirement, no overdraft fees, free incoming international wire transfers, and zero foreign currency markup. Aeldra’s revenue model stems from two key streams:
- Revenue from interest on deposits
- Debit card interchange fees paid by retailers
Interest Rates and APY*
Aeldra Quantum accounts are interest bearing as per the following schedule:
- 2.00% interest on balances between $0 and $5,000 (2.02% APY*)
- 1.50% interest on balances between $5,000 and $15,000 (1.51% APY*)
- 1.00% interest on balances greater than $15,000 (1.00% APY*)
*APY stands for Annual Percentage Yield. It may be higher than the annual interest rate quoted as it takes into consideration monthly compounding.
Aeldra will disclose interest accrued on account deposits in monthly statements. Interest accrued in each month is paid out at the beginning of each subsequent month.
Account Funding and Money Movement
Following the Reserve Bank of India (RBI) Liberalised Remittance Scheme (LRS), students and/or their parents can fund their Aeldra U.S. Student Bank Account from an Indian bank account via the SWIFT mechanism for international transfers. Detailed steps for account funding, along with an explainer video, are posted on the Aeldra website and in-app FAQs.
As per the LRS, Indian residents can remit up to $250,000 in each Financial Year (FY). FY 2021-2022 runs from April 01, 2021, to March 31, 2022. As per RBI, any remittance amount in an FY exceeding INR 7,00,000 will attract Tax Collected at Source (TCS) of 5%. However, remittances related to an education loan taken from a recognized lender will attract 0.5% TCS on sums exceeding INR 7,00,000 in an FY.
For domestic USD transfers, Aeldra’s in-app Money Movement feature enables free Automated Clearing House (ACH) transfers to any other U.S. bank account. Aeldra customers can benefit from the in-app Aeldra Pay feature – a free and instant peer-to-peer payment mechanism between Aeldra customers.
Frequently Asked Questions
Q1. Who is eligible to establish an account with Aeldra?
Ans. People in the following groups can now register for an Aeldra account:
- Adults in the United States with an Indian Passport or a Social Security Number.
- Adult Indian citizens in possession of an Indian passport
Q2. Is it possible for F1 students to get a bank account?
Ans. Applicants with an F1 visa can create a bank account in the United States. Banks will need I-20, passport, and some other papers.
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