Think about it for a second: when’s the last time you went into a physical bank branch? Can’t remember? That might mean Chime, or a bank like it, is for you. Designed originally as a bank for millennials, Chime can be a good bank for nearly anyone interested in mobile banking.
The bank was created in 2013 by Chris Britt and Ryan King. It’s completely online, so there are no branches or ATMs of its own, but it does offer a large fee-free ATM network through partner banks. For most users, that is not necessarily a bad thing. Accounts are protected by the FDIC just like the branch on the corner, so you still have all the security of a traditional bank without all the fees and fluff.
And that’s really where Chime shines: banking there is as fee-free as you can get. Here’s a bit more about the bank and how it works.
Chime Bank
| Minimum Savings Deposit | Maximum Savings APY | 1-Year CD Rate | J.D. Power Survey Score | Key Benefit |
| $0 | .01% | N/A | N/A | No fees |
What we like about Chime
The most important thing to love about Chime Bank is the absence of fees. Essentially, the bank makes money from Visa each time you use your Visa debit card. Without the overhead of large banks, they don’t need to rely on fees to support a large infrastructure. In fact, the only fee you’ll normally encounter will be a $2.50 out-of-network ATM fee.
Even that is not likely. You can use any MoneyPass or Visa Plus Alliance ATMs for free. The app and interface are both easy to use, the app has some great features and opening an account takes only five short minutes. You can either use the micro-savings feature, and round up purchases to the nearest dollar and put the rest in savings, or you can automatically have 10% of your payroll direct deposit routed to savings. Both are optional.
So users are saving money by not paying recurring bank fees and overdraft charges, and actually saving money becomes simple with Chime.
Things to consider
Every bank has downsides, and Chime is no exception. First, due to lack of physical locations, depositing cash is extremely difficult unless you do so through another external account you have linked to the Chime app.
There is a mobile check deposit feature, but some users have complained that it is difficult to use. Direct deposit seems to be the best way to get money into your account. To add to the frustration, customer service also takes a long time to respond through the app — a matter of days, not hours.
The only other major issue? The savings rate is exceptionally low, approaching zero. It’s almost not worth putting money in the account and leaving it there. The only advantage is that it won’t show on your checking balance, so hopefully, you will not be as tempted to spend it.
If you’re looking for high, or even decent, yield, Chime is not the place to get it. There are also no physical checks available, although there is a workaround.
Checking accounts
When you first sign up, you’re signing up for Chime’s Spending account. This is essentially a checking account. There is no minimum balance, and you can and should use direct deposit. Getting money into the account, especially cash, is really difficult and must be done through Green Spot, which usually charges fees.
For a checking account, there are no physical checks offered. However, once you have an account for more than 30 days, you can send a check through the app’s checkbook feature. Essentially, they’re printing a check and sending it for you.
There are also some other handy features. There are cash-back rewards from some retailers and other places, and they change from time to time, giving the program some flexibility. There is also a great Split the Bill feature, which will send a text message to the person of your choice with a link to pay you back through Venmo or Chime if they also have an account.
Savings accounts
There are a couple of cool ways to save with Chime. The first is the micro-savings feature, which is similar to other banks’ “round-up” features. Purchases can be rounded up to the nearest dollar, and the remainder put in savings. It’s amazing how fast those small amounts can add up.
You can also set the account up so that 10% of direct deposits are put automatically into savings. Both of these programs are not required.
There are two things to consider about savings. For one thing, when you sign up for Chime, you are signing up for a spending account first. To sign up for a savings account, you will have to sign up a second time through the app, giving them all of your information all over again. The second issue is the savings rate, as discussed above: at 0.01%, it is so close to zero that it’s almost like it isn’t even there.
The savings account is more to keep your balance out of your spending account so you won’t touch it.
Money-market accounts, CDs, IRA account, credit cards, and more
Chime only offers checking and savings — no MMAs, CDs, or other accounts. That means that if you want those things, you will still have to bank elsewhere. This makes Chime a great cash management account for those with simple banking needs, but not a good option for those who want everything in a single bank.
Investing
Chime has no investing plans, so you’ll need an app like Robinhood, a more traditional trading app like E-Trade or another similar app if you want to trade in mutual funds.
The bottom line
Chime is a great bank for those who are more comfortable with virtual banking than with a brick-and-mortar institution, and also those who only need pretty basic financial services. If you need full-service banking or work with cash a lot, Chime may not be the right answer for you.
If you’re looking for a fee-free checking alternative, however, Chime is worth a closer look.
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