Forbes Review of Chime Bank – Pros & Cons

Monthly banking charges add up. According to a 2018 study by Deposit Accounts, the average bank or credit union customer pays nearly $34 for an overdraft, $2.28 for an ATM Fee, and $4.58 in monthly fees. This is one nuisance Chime wishes to solve. test

Mobile banking app Chime offers both spending and savings accounts. When opening an account with Chime, you get a Spending Account, a Visa Debit Card and an optional Savings Account.

Designed for banking with a smartphone instead of at a brick-and-mortar location, Chime is advertised as a bank account for Millennials. For this reason, Chime works best for anyone with an uncomplicated financial situation, looking to set up an easy mobile-only account.

Below is our review of Chime, including its features, pros and cons of a mobile-only bank account and other benefits and disadvantages.

Chime Spending Account Features

While some banks levy monthly maintenance fees, minimum balance or other fees, a spending account at Chime imposes no monthly fees. It also requires no minimum balance requirement to set up. For this reason, Chime is a great option for those looking for a no-fee spending account.

Opening a Chime Spending Account is required before you can open a Chime Savings Account.

Something that differentiates Chime is the ability to receive the direct deposit of your paycheck faster than with other banks. With the spending account, Chime allows you to receive access to your pay up to two days earlier when you use direct deposit for your paycheck. According to Chime, it immediately processes your employer’s check, meaning you will likely receive your paycheck earlier than the typical Friday payday. Here, it’s important to read the fine print from Chime’s website:

“Faster access to funds is based on a comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct Deposit and earlier availability of funds are subject to payer’s support of the feature and timing of payer’s funding.”

With monthly direct deposits of $500 or more, Chime offers an optional SpotMe service. SpotMe will cover debit card purchase overdrafts of up to $100 with no overdraft fees. The SpotMe payment will give your spending account a negative balance, which gets repaid when your next deposit arrives. SpotMe limits start at $20 and can be increased up to $100 or more.

Finally, Chime has no foreign transaction fees. While other banks can charge up to 3% when shopping or withdrawing money from ATMs overseas, Chime does not charge for these transactions.

Chime Savings Account Features

Chime now offers a competitive high-yield savings account, currently earning 1.60% APY.

An advantage of Chime’s savings account is its built-in feature to help you save. With the automatic savings Round Up feature enabled, Chime will round up every purchase on your Chime debit card to the nearest dollar and deposit the difference into your savings account. For example, if a cup of coffee costs you $1.75, Chime will automatically transfer 25 cents from your spending account to your savings account.

Also, with monthly direct deposits of $500 or more, Save When I Get Paid will automatically transfer 10% of your paycheck into your savings account. Both this and the Round Up feature are optional.

All Chime accounts are FDIC insured up to the standard maximum $250,000 per account, per ownership category, through its partner banks, Stride Bank, N.A. (FDIC# 4091) or The Bancorp Bank (FDIC# 35444).

Mobile App

The Chime app allows you to set up direct deposit, transfer money among your accounts, find an ATM and review your recent transactions. Moreover, Chime’s iOS version is rated 4.7 stars out of 5, and its Android app is rated 4.6 stars out of 5. The app enables you to turn off your debit card instantly. It also notifies you when Chime processes transactions to your account.

Chime offers a payment app feature, Pay Friends, which enables you to transfer funds to friends and family who also have Chime spending accounts. The app will import your contacts, or you can provide your friend’s email or phone number. There is no fee for this service.

You will receive daily bank account balance notifications via the app, as well as instant transaction alerts whenever you use your debit card.

While your Visa Debit Card can be used in Apple Wallet, it is not available for use with Android Pay or Samsung Pay.

Member service is available via chat in the app, by telephone or by email.

Pros

Chime offers several features we like:

• No Fees. There are no monthly maintenance or overdraft fees, no minimum balance required and no international transaction fees.
• Competitive APY. The Chime Savings Accounts currently earns a 1.60% APY.
• Faster Pay. Chime says you can get access to your paycheck up to two days earlier with their direct deposit.
• Automatic Savings. As noted above, Chime offers two ways to automate savings. These features can help members build an emergency fund or save for other goals.
• Mobile App. Chime’s mobile app has been well received, based on the iPhone and Android reviews we evaluated. Can use Pay Friends to send money instantly.
• Free ATMs. Chime offers more than 38,000 fee-free ATM locations.

Cons

Nothing in life is perfect, and Chime is no exception:

• No Joint Accounts. Banking with Chime is not the right choice for those wanting a joint account. It doesn’t offer them.
• Cash Deposits Take Work. Since Chime provides online-only bank accounts, putting cash into your Chime account is a challenge. You’ll need to go to a Green Dot cash deposit location, which may charge a fee of up to $4.95 to deposit cash.
• Out-of-Network ATM Fees. Although you will have access to more than 38,000 fee-free MoneyPass and Visa Plus Alliance ATMs, Chime charges $2.50 per transaction through an out-of-network ATM.
• No Personal Checks. If you need to send a check, Chime can send one for you, although you are limited to $5,000 per payment. Payment requests made through Chime Checkbook can take three to nine business days to arrive.

How Chime Stacks Up

Chime’s competition comes from three types of banking services:

1. Brick-and-Mortar Banks. The big advantage traditional banks have over Chime and online banks is a physical branch. If talking to your banker face to face is important to you, Chime is not the answer.
2. Online Banks. With an online bank, you typically get the best interest rates available on deposit accounts and low fees. If a competitive savings rate is your goal, then Chime is definitely worth considering.
3. Mobile App Banks. Chime isn’t the only banking product to focus on the mobile app experience. Two others are Simple and Aspiration.

The Bottom Line

Chime is designed for those looking for a no-fee mobile bank account with built-in features to help save and earn extra money.