Simple Bank Review 2019

Simple is an online bank that appears to be designed with the tech-savvy millennial in mind.

simple bank reviewSimple’s main selling points are their innovative budgeting tools and the fact that they offer an aggressive 2.15% APY on savings accounts, which is much higher than the average interest rates of today’s major national banks.

Simple Bank was founded in 2009 and is headquartered in Portland, Oregon. Compared to some banking juggernauts (e.g., Chase), Simple doesn’t have an incredibly long track record.

Keep reading to find out everything there is to know about Simple Bank so you can determine whether it makes sense to open up an account there.

Simple Checking Account

The benefits of a Simple’s Checking Account are similar to those offered by many other brand-name banking institutions.

Here’s a quick rundown of the main features:

  • Direct Deposit: Like any traditional bank, your employer’s direct deposits will go straight into your checking account.
  • Photo Check Deposit: Simply snap a photo of a signed check and the funds will be deposited into your account immediately.
  • Visa Debit Card: Account-holders receive a standard Visa debit card that can be used wherever Visa is accepted. That’s basically everywhere.
  • Instant Transfers: You can instantly transfer funds to other Simple account holders via a feature that’s similar to Quick Pay with Zelle, which most major national banks offer.
  • External Account Linking. Simple’s mobile app makes it super easy to transfer funds to and from your Simple account with the swipe of a finger.

Simple Savings Account

Simple’s high-yield savings account is called a Protected Goals account. To open a Protected Goals account, you first need to have a Checking or Shared Account.

Next, you can simply open a Protected Goals account within the app, and start earning up 2.15% APY.

 

simple bank online application

Simple Budgeting Tools

Simple’s budgeting tools make this bank truly unique in the online banking industry.

Here are some of Simple’s main budgeting features:

Goals

Simple’s Goals feature enables you passively save funds toward a financial goal that you set.

Here’s how it works: Let’s say you want to take a cross-country road trip with your buddies (which I highly recommend!). You crunch the numbers and estimate that the trip will cost $5,000 when all is said and done. Unfortunately, you don’t have $5,000 standing by for a rainy day. So you set your sights on taking the trip in one year from now, figuring you’ll work hard and stockpile money over the next 12 months.

Using the Goals tools, which is found right within the Simple app, you can set the amount of your financial goal and the date by which you hope to achieve it. After doing that, Simple will automatically move funds from your checking account into a Protected Goal Account, so that you automatically save those funds (and won’t spend them) before your departure date.
simple bank goals

Emergency Fund

Without a doubt, everybody should have an emergency fund set aside so that they can absorb unplanned expenses. Unfortunately, many people don’t. In fact, one recent report found that 40% of Americans can’t afford an unexpected $400 expense.

If you’re looking to establish an emergency fund, Simple’s got you covered. The process is one step easier thanks to a separate Emergency Fund account feature that’s found right within your Protected Goals account.

simple emergency fund

Safe-to-Spend

Juggling bills, living expenses, food costs, and incidentals can be tricky for those on a budget. The last thing you want to do is splurge on something that makes it difficult for you to afford the things you need to afford.

Enter Simple’s Safe-to-Spend tool, which provides insights into your real-time cash status. Instead of having to crunch the numbers yourself, Safe-to-Spend gives you up-to-date insight into your account balances so you’ll know whether or not you should really buy that $15 avocado toast.

simple safe to spend

Visualized Spending

With so much cash coming in and flowing out, tracking your spending can be difficult. That’s where Simple’s Visualized Spending tool can be particularly helpful.

It enables you to quickly see how much money you’ve spent and how much money you’ve earned, making it that much easier to make sure you’re living within your means—and saving for the future.
visualized spending with simple bank

Simple Bank FAQs

Next, let’s take a look at some of the most common questions asked about Simple to give you more information to decide whether it makes sense to open an account with the online-only bank.

Is Simple Bank a Real Bank?

Yes. Simple is a real bank that offers online checking accounts and budgeting tools. The company does not have any brick-and-mortar branches, but most transactions can be conducted through Simple’s mobile app. If you want to deposit cash, however, you will need to jump through a few hoops.

Is Simple Bank FDIC-Insured?

Yes. Simple is FDIC-insured through its partner BBVA USA. That means that deposits of up to $250,000 are guaranteed by the federal government.

What Bank is Simple With?

Simple is owned and backed by BBVA USA. BBVA is an abbreviation for Banco Bilbao Vizcaya Argentaria, which is the 42nd largest bank in the world—and the second largest bank in Spain.

How Does Simple Bank Make Money?

Simple earns money from transaction fees that accrue every time you use your Simple Visa Debit Card. Simple’s parent company, BBVA USA, earns the bulk of its revenue as a traditional bank. As such, BBVA USA earns revenue from credit cards interest and fees, mortgage loans, and more.

Pros & Cons of Simple Bank

Pros

  • High Interest Rates: Under Simple’s Protected Goals program, you’ll receive 2.02% APY as long as you maintain a balance of at least $2,000. Balances of $10,000 and above earn an impressive 2.15% APY.  
  • Budgeting Tools: Simple’s suite of innovative budgeting tools are unmatched by any bank or app. For example, Safe-to-Spend compares your available balance to your Goals and scheduled payments, giving you the peace of mind that comes with knowing you’re not spending more than you can afford.
  • Shared Accounts: Simple makes it easy to fund a joint account with your partner. First, you’ll each need to create your own accounts. After that’s done, you can create a joint account that can be funded from each of those accounts.
  • Low Fees: If you’ve ever had a bank that charged hefty fees each month, you know how brutal it can be to look at your statement and see a massive financial behemoth eating big chunks of your money each month. Simple has little to no fees. They “penalize” you by offering a super-low interest rate if your balance dips below $2,000. Simple Bank, however, does charge foreign transaction fees.

Cons

  • Low Interest Below $2,000: While Simple offers an attractive interest rate on balances above $2,000, the same can’t be said for balances that dip below that threshold. Whereas high-yield savings accounts like Ally Bank and American Express Personal Savings don’t require minimum balances to get fat interest payments, Simple does.
  • No Brick-and-Mortar Locations: As an online-only bank, Simple does not have any brick-and-mortar locations. That means that you can’t deposit cash with Simple, and you can’t pop into your neighborhood branch to speak with a teller.
  • No Checks: Simple doesn’t offer paper checks, either. So if you need to cut a physical check to your landlord or Uncle Sam, you’re out of luck.

So, Is Simple Bank Right for You?

Choosing which bank to trust with your money is a major decision. While Simple Bank is a relatively new financial institution, it has a lot of upside. The bank’s budgeting tools and high interest rates are certainly worth considering.

That said, if you’d like to be able to go inside a brick-and-mortar location, you want to earn a lot of interest without having to maintain a minimum balance, or you get paid in cash and want a way to deposit it, you’ll need to look elsewhere.

I hope this post has helped set the record straight on Simple Bank. If it all sounds good, give it a whirl. Who knows? Simple’s high interest rates could end up becoming a critical tool that helps you achieve financial independence. Thanks for reading!

Grant Sabatier

Creator of Millennial Money and Author of Financial Freedom (Penguin Random House). Dubbed "The Millennial Millionaire" by CNBC, Grant went from $2.26 to over $1 million in 5 years, reaching financial independence at age 30. Grant has been featured in The New York Times, Wall Street Journal, BBC, NPR, Money Magazine and many others. He uses Personal Capital to manage his money in 10 minutes a month.

Latest posts by Grant Sabatier (see all)

Posted in: Best Banks

No Comments

Post A Comment

[PDF]
[PDF]