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Chime Bank is a mobile-first online bank that offers checking and savings accounts that are easy to manage on-the-go through a brilliant mobile app.
Chime offers a fee-free checking account with a really neat SpotMe feature that can prevent you from incurring overdraft fees.
Additionally, Chime’s online savings account offers innovative ways to help you automatically save money. Keep reading to learn more.
Chime Bank Overview
Founded in 2013, Chime is an online-only, mobile-focused bank, and a relative newcomer to the world of online banking.
The company’s motto is to not charge its customers unnecessary fees. Instead, Chime wants its customers to get ahead.
Since Chime is an online-only bank, the company doesn’t have any brick-and-mortar locations that you can pop into. Instead, all of Chime’s services are offered through their award-winning mobile app.
What Services Does Chime Bank offer?
Chime offers a checking account, branded as the Chime Spending account and a savings account:
Chime Spending Account
Chime offers a fee-free online checking account, which is known as a Chime Spending Account.
Account-holders can process most transactions right through the mobile app. Some of the Chime Spending Account’s main features include:
- Pay Friends: This is a free way to instantly transfer funds to friends (similar to Quick Pay with Zelle).
- Mobile Check Deposit: This allows account holders to quickly deposit checks using their smartphones.
- Chime’s Visa Debit Card: Enables you to make traditional debit card purchases wherever Visa is accepted. Customers can also withdraw funds from Chime’s network of over 38,000 ATMs throughout the U.S.
- Get Paid Early: This is one of the coolest features that Chime offers. Account-holders that link direct deposits with their Chime Spending Account are eligible to receive those funds two days earlier than they would with a traditional bank account. This is because Chime processes your employer’s deposit much quicker than traditional banks.
- SpotMe: This is a fee-free overdraft service for eligible Chime account holders. Here’s how it works: If you overdraft your account by $50, for example, Chime will “spot” you that $50. Then, the next time you receive a direct deposit, Chime will automatically deduct $50 to pay itself back. There are no fees for SpotMe. However, after Chime has recouped it’s funds, account holders are given the option to “leave a tip” (similar to an Uber or Lyft ride). Who doesn’t want to give their bank a tip?! To qualify for SpotMe, customers must have at least $500 in monthly direct deposits.
Chime Savings Account
With Chime’s Savings Account, you can “watch your savings grow automatically,” the company says. Here’s how:
- Built-in Automatic Savings. This feature routes a percentage of your direct deposits directly into your savings account each pay period. For example, if you’d like to save 10% of your paycheck, you can do so without having to manually transfer funds.
- Save When You Spend. When you enable this feature, Chime will automatically round up your spending transactions to the nearest dollar and then automatically deposit those funds into your savings account. For example, if your cup of dark roast costs $2.54, Chime will add $0.46 to your savings account. It’s an easy way to start stockpiling proverbial pocket change.
Is Chime Bank legitimate?
Yes. Chime Bank is a legitimate FDIC-insured online bank, which means that deposits of up to $250,000 are guaranteed by the government.
What’s more, Chime takes account security very seriously.
Chime accounts feature 128-bit AES encryption and you can instantly block your debit card in the app. That way, if you lose your card, you get the peace of mind that comes with knowing no unscrupulous actors can charge anything to it.
Further, you can enable instant transaction alerts that notify you every time your debit card is used.
Pros & Cons of Chime Bank
- No Fees: By far, Chime’s no-fee philosophy is the bank’s main benefit. Thanks to features such as no overdraft fees (for eligible account holders), no monthly maintenance fees, no minimum balance fees, and no foreign transaction fees, Chime customers can be assured that they are not going to waste money on unnecessary bank fees.
- Cool and Unique Features: Chime has some of the most innovative online banking features on the market. SpotMe, Get Paid Early, Built in Automatic Savings, and Save When You Spend all seem to be designed with the tech-savvy millennial in mind.
- Mobile-Friendly: Chime’s award-winning mobile app makes managing your account online super easy. I also really like Chime’s instant transaction alerts and the fact that you can disable your debit card right from the app.
- Second Chance Banking: If you’ve made some financial mistakes and have a less than ideal credit score, you can probably still open an account with Chime. This is because Chime does not use traditional credit reporting agencies to determine your creditworthiness.
- No Physical Locations: While you may not need to visit a physical bank most of the time, you’ll simply never have that option with Chime. So if you want paper checks or want to deposit cash, you’ll have to find another option.
- Tricky Cash Deposits: Cash deposits have to be made at a Green Dot location. As a result, you might have to pay a fee. And who wants to deposit cash through Green Dot in the first place? What even is Green Dot? Do you even want to find out?
- Limited Services: Chime does not offer many of the services that bigger banks offer. With that in mind, if you want credit cards, a mortgage loan, investment products, or car loans, you’ll have to get those from another bank.
- Poor Savings Interest Rate: Chime’s savings interest rate is an abysmal 0.01% APY—similar to the low rate offered by most major national banks. (For information on a high-yield savings account, check out my Ally post.)
What Bank is Chime Bank Through?
As an account holder, you’ll probably never have to interact with either of those financial institutions.
Is Chime Bank a Prepaid Bank?
No. Chime Bank is not a prepaid bank. Chime Bank offers online checking and savings accounts like other standard banks.
The main difference is that Chime’s services are online-only. What’s more, Chime positions itself as the ideal alternative to prepaid cards.
Do You Really Get Paid Early with Chime?
Yes! This is one of the coolest features that Chime offers.
The Get Paid Early feature allows account-holders that link direct deposits with their Chime Spending Account to be eligible to receive those funds two days earlier than they would with a traditional bank account.
This is because Chime processes your employer’s deposit much quicker than traditional banks.
Can You Overdraft with Chime?
Yes. You can overdraft with Chime—just like you could with any other bank.
However, a major benefit of Chime is that in the event you do draw more funds than you have in your account, you may not have to pay a fee thanks to the SpotMe feature.
To clarify, it is still not recommended to overdraft your account. If you’re having issues in this department, check out my post 101 Ways to Save Money.
So, is Chime Bank Right for You?
Chime has some pretty cool features that no other banks offer. If you absolutely hate bank fees and you don’t need the services of a traditional brick-and-mortar bank, Chime might just be the perfect fit for you.
Also, if you’re in a situation where you are trying to rebuild your credit or if you have been turned down by other banks, I would definitely consider chiming in, so to speak. Chime Bank might be a great way to get your financial health back on track.
Choosing which bank to trust with your money is a major decision. With so many options, it can be a tricky one, too. I hope that this post has answered all of the questions you might have about Chime Bank. Good luck and happy banking!
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