Banking is an essential service, and for many people, it’s also an expensive one. Monthly fees for even basic features such as an overdraft, ATM withdrawals, and the ability to send bank transfers all mount up. Some banks are also charging a $25 fee to close an account. Chime is a relatively new entry to the marketplace that aims to address that by offering banking with no monthly fee and no overdraft fee.
Launched in 2014, Chime is an online-only service that provides spending accounts and savings accounts. There are no branches, and the company does not operate any ATMs of its own. Instead, it partners with other banks to create an extensive network of fee-free ATMs for customers.
- 1.00% APY on savings account
- No monthly fee
- No overdraft fee
- Fairly welcoming to customers with prior credit issues
- Easy to set up regular savings
- Fast access to direct deposits
- ATM fees on any out-of-network transactions using your Chime card
- The lack of branches makes cash deposits hard
- Limited features on bank accounts
- No joint account feature
- No checkbook – personal checks must be ordered in-app
Flexible SpotMe Overdrafts
Users who deposit over $500 per month into their Chime account can enroll in the SpotMe offering. This optional feature allows users to go overdrawn by $20 to $100 for no extra fee. When the next payment comes in, Chime will use that to cover the outstanding balance. New users start with a $20 SpotMe allowance, which is reviewed regularly based on the user’s account history and spending patterns.
Chime also offers an online-only savings account. The interest rate on this account is quite low, however, it can be useful for those who struggle to save using more traditional accounts. Users have the option of depositing a percentage of their income each time they get paid or using the Save When You Spend feature which rounds up payments to the nearest dollar. So, if you spend $3.60 on a coffee, $0.40 will be transferred to your savings account.
Who Should Choose Chime?
Chime is an exciting option for people who have no or limited credit history, and those who have had issues with current accounts. It is easy to open an account, and unlike many other accounts, there is no minimum balance requirement. This makes Chime suitable for those who are on a low income. Many low-income communities are affected by the closure of bank branches in their areas. Chime is also an appealing option for tech-savvy people who are confident in managing an online-only bank account.
The Chime app has positive reviews on Android and iOS. It is easy to use and has handy features, such as allowing users to block their cards instantly. Sending payments via the app is also easy to do.
Overall, Chime is a good option for those who would not make use of all of the features of a traditional bank. If you want fast access to deposits and are happy with a small overdraft and online-only account management, the lack of fees makes Chime a great choice.
Check out our blog to learn more ways to save!