Although the likes of Revolut and N26 have grown to exponential heights in Europe, challenger banking apps are still a relatively new phenomenon in the US.
By this, we mean that Americans have only recently begun to realize the benefits that an alternative app-only bank account offers. This includes a super-fast account opening process, zero fees, instant transaction notifications, high-end security features, and more.
One such provider that is looking to take the US challenging baking scene by storm is Chime Bank.
The app offers both a spending and savings account, and it costs nothing to get started.
Each Chime Bank account also comes with a fully-fledged debit card, so you can spend money and make ATM withdrawals with ease. Crucially, funds held in your Chime Bank account are fully insured by the FDIC.
Keen to find out whether or not the app-only banking provider is right for you? If so, be sure to read our in-depth Chime Bank review. We’ll cover everything you need to – such as how the app works, what it allows you to do, fees, regulation, and more.
What is Chime Bank?
Founded in 2013, Chime Bank is an app-only FinTech provider that gives you access to everyday banking features from your mobile phone.
The company’s overarching philosophy is to change the way that Americans view banking. In terms of its similarities with a traditional financial institution, Chime Bank allows you to send and receive funds domestically as you normally would.
You can also have your salary paid into your Chime Bank account, and in some cases, the provider will credit the funds two days in advance. As an app-only bank account, Chime does not have any physical branches. Instead, everything is facilitated via the app. This allows the provider to pass on the cost savings of operating in a digital-only manner.
For example, there are no hidden fees or minimum deposits required, and applying for an account is free. If you need to use your debit card overseas, Chime offers this on a fee-free basis. While we are on the subject of the Chime Bank debit card, you can use the card anywhere that Visa is accepted. This includes millions of in-store and online merchants, as well as most ATMs.
Every time you do use your debit card to make a purchase, a notification will be sent straight to your phone. This ensures that nobody is using your debit card other than you. If you were to lose your debit card, Chime Bank allows you to freeze it instantly, and then unfreeze in the event that you manage to find it.
As we will discuss in more detail further down, Chime Bank also offers a savings account. However, the top-tier rate paid on your money is 0.01% APY. This figure mirrors that of traditional financial institutions such as Chase and Wells Fargo.
Finally, Chime Bank is a member of the Federal Deposit Insurance Corporation (FDIC) scheme. This means that your deposits would be protected by up to $250,000 in the unlikely event that Chime went out of business.
Features and Benefits of Chime Bank
You need to assess whether or not opening an account with an alternative banking app like Chime is worth your while.
After all, it’s a major decision switching from an established financial institution to a challenger bank that was launched just 7 years ago.
With that being said, we’ve broken down the main features and benefits offered by Chime Bank below.
Quickfire Account Opening Process
The benefits of using Chime Bank starts at the very offset with the account opening process. If you’re based in the US, you’ll know first-hand just how much red-tape is involved in opening a new bank account.
You’ll likely need to visit a physical branch and sit down with a banking clerk, and then fill out a range of forms. Moreover, the bank will likely ask you to bring copies of supporting documentation with you, such as a passport and proof of address. It can then take days before your account is ready to use.
This is in stark contrast to the customer experience offered by Chime Bank. In fact, it rarely takes more than a few minutes to get your new account up and running. The reason for this is that Chime Bank utilizes cutting-edge technologies that allows it to verify identities automatically.
Mobile Banking
When it comes to performing everyday banking tasks, everything can be done via your Chime Bank app. For example, if you want to transfer funds to friends or family members, you simply need to set them up as a payee, enter how much you want to transfer, and submit the transaction.
This is much more convenient than having to use an online banking platform via a desktop computer, or worse – transferring funds over the phone.
You can also pay your bills via the Chime Bank app. For example, if you need to pay your monthly utility or phone bill with your account balance, Chime allows you to do this with ease.
Deposit Checks Virtually
Although the usage of checks in the US is slowly but surely coming to an end, some employers still prefer this as a means to pay its staff. If this sounds like you, then you’ll know how frustrating it can be to have to physically deposit the check at your local banking branch. Instead, Chime Bank allows you to do this virtually.
All you need to do is take a photo of the check from your mobile phone camera. The underlying technology will then be able to validate the authenticity of the check, before adding the funds to your Chime account.
Notifications and Alerts
One of the most attractive features of using an app-only bank account like Chime is the real-time notifications it offers. For example, you will receive an instant notification on your mobile phone every time you use your Chime debit card. This allows you to keep track of what you are spending, and it makes you aware in the event that your card is used fraudulently.
The instant notification feature is also super useful if you plan to use your Chime debit card overseas. The reason for this is that you will get a full breakdown of how much the transaction costs you in US dollars. Ordinarily, you would be left in the dark on real-time exchange rates until you get home and check your statement.
Early Salary Payment
Chime Bank also offers a feature that allows you to receive your monthly salary two days early. In order to qualify, you will need to get your employer to pay your wages via direct deposit.
Chime will email you the form when you first sign up, so you simply need to hand it to your employer as you normally would. Once the direct deposit has been set up, Chime Bank will credit your fixed monthly salary two dates early. This is especially useful if you are not due to be paid until Monday and you need the funds over the weekend.
Chime Bank Fees
So now that we’ve covered the main features available at Chime Bank, we are now going to explore how much the app actually costs to use, After all, one of the provider’s main slogans is “banking with no hidden fees”.
First and foremost, it costs nothing to make an application, nor will you need to fund your account.
Instead, as soon as you pass the automatic verification process, your account will be activated instantly. You are never required to keep a minimum balance either, nor will Chime charge you any monthly maintenance fees. As such, Chime Bank is completely free to use at the point of use.
When you consider that the American household pays an average of $329 in banking fees each and every year, this is a major plus-point. This is typically because your average daily balance falls below the minimum, or because you did not make enough debits as stipulated by the account.
However, you do need to make some considerations regarding possible ATM fees, which we will cover in the next section.
Using Your Chime Bank Card at an ATM
ATM fees contribute huge profits for big banks in the US. Known as an ‘out of network fee’, this is charged when you use your debit card at an ATM that isn’t owned by the card issuer.
For example, if you attempt to use a Wells Fargo debit card at a Citi ATM, you’ll pay a fixed fee. Recent figures estimate that the average out of network ATM fee now amounts to a whopping $4.72.
In the case of Chime Bank, the provider does not have any ATMs of its own. Instead, the bank is part of the MoneyPass network. This is good news for you as a Chime Bank customer, as the network consists of over 32,000 ATMs throughout the US. As such, you’ll be able to withdraw cash free of charge, as long as you use a MoneyPass ATM.
However, there might come a time where you need to use your card at an out of network ATM. If you do, you will be charged on two fronts. First and foremost, you will need to pay the fixed fee charged by the respective out of network ATM provider. Chime Bank has no control over these fees, so the amount will be debited from your account.
Secondly, Chime Bank will also charge you $2.50 on top of the specific ATM fee. As such – and taking into account the $4.72 figure we noted above, withdrawing cash from an out of network ATM will average $7.22 per transaction.
Fee-Free Overdrafts
Chime Bank promotes a headline offer of fee-free overdrafts. While the app is true to its word, the feature acts more like overdraft protection. The reason for this is that overdraft limits are capped at just $100. If you were to use your debit card and you went overdrawn, Chime would cover the transaction at no cost to you.
This is a really attractive offering from Chime, especially when you consider that the average overdraft fee in the US now stands at a staggering $33.36.
In order to qualify, you will need to fund your Chime Bank account with at least $500 per month. As this needs to be via direct deposit, your monthly salary payment would suffice. You will initially be offered a $20 limit, and you can increase this at any time up to the full $100.
If you do dip into your overdraft, Chime will replace the negative balance the next time you receive a payment. You won’t automatically be placed on the overdraft protection scheme, so you’ll need to set this up via your Chime Bank app. The service is known as ‘Spot Me’, and you’ll find it within your account settings.
Using Your Card Overseas
Using a traditional bank card overseas can be a costly endeavor. Banks typically charge on two fronts. You will likely pay a fixed fee every time you use the card, regardless of whether you withdraw cash from an ATM or pay in person. Moreover, you’ll also get hit with a hefty foreign exchange fee. In most cases, the bank will take the real-time exchange rate and then add 2-3% on top.
It is also likely that the specific ATM charges you a fixed fee. The good news is that Chime Bank does not charge any foreign transaction fees at all. As such, the only fee that you need to worry about is the local ATM itself, which is out of the hands of Chime.
As we briefly noted earlier, the Chime debit card is also beneficial for overseas spending because of the real-time notifications you get. For example, let’s say that you’re eating at a restaurant while on vacation in India.
When you receive the bill, you will likely estimate the cost in US dollars and think nothing more of it. However, by using your Chime debit card, you will receive an instant notification to your phone. This will detail the total cost of the purchase in both the local currency and US dollars.
How do I Fund my Chime Bank Account?
One of the biggest concerns faced by those that are yet to take the challenger banking plunge is that of depositing cash. The reason for this is that banks like Chime do not have any physical branches.
With that said, there are a number of different ways that you can deposit funds into your account.
- Direct Deposit: If you’re looking to get your wages paid into your account, Chime will email you a form when you first register. You simply need to hand over the direct deposit form to your employer.
- ACH: The easiest way to transfer funds into your Chime account is via ACH. Just enter your Chime bank account details when making the transfer.
- Transfer Initiated by Chime: You also have the option of connecting an external bank account with Chime. Not all banks are supported, so you’ll need to check with Chime first.
Although this option is free, you will need to wait up to five working days for the transfer to be credited. - Cash Deposit: For those of you that wish to deposit cold-hard cash, Chime has you covered. The provider does this through GreenDot. The company has more than 60,000 retail locations throughout the US. You simply need to hand over the cash to the retail agent, alongside your Chime account details, and they will take care of the rest.
Take note, you will be limited to a maximum deposit of $1,000 per 24 hours, or $10,000 per month. This is to ensure that Chime Bank remains fully compliant with anti-money laundering laws.
Chime Bank Savings Account
Although Chime Bank markets its application as both a spending and savings account, you won’t earn much in the form of yield when compared to other savings instruments.
Chime Bank pays 1.6 % APY on your deposits.
What we do like about the Chime Bank savings department is its automatic top-up feature. In a nutshell, the app allows you to round up your debit card purchases to the nearest dollar.
- For example, let’s say that you purchase a cup of coffee for $2.50.
- By using your Chime Bank card, you would have $3 debited from your primary account. $2.50 of this would go to the coffee merchant as usual, with the $0.50 being placed into your Chime savings account.
- This particular feature is somewhat psychological, insofar that all you are really doing is moving money from one Chime account to another.
However, it does have the desired effect of motivating you to save money. Chime Bank will give you regular updates on how your savings goal is going, which is also helpful. You will also have the option of receiving daily spending reports. This outlines how much you spent the previous day, and on what purchase categories (such as coffee, entertainment, etc.).
Is my Money Safe at Chime Bank?
One of the main reasons that the challenger and app-only banking space is yet to really take off in the US is because of trust. Ultimately, Americans would rather pay fees to bank with financial institutions that they know and trust.
This not only comes at a monetary cost for consumers, but old-school banks do not offer the same conveniences that the likes of Chime offer.
Nevertheless, it is crucial to note that your money is 100% safe at Chime. The overarching safeguard that will protect your money is that of the FDIC partnership. As we briefly noted earlier, this means that were Chime Bank to go out of business, the FDIC protects the first $250,000 that you have saved.
The FDIC is actually an independent government agency, so the only risk you face by joining Chime Bank is if you deposited more than $250,000.
Security Features
On top of the FDIC protection, Chime Bank also offers a number of innovative security features to keep your account safe. For example, all transactions are posted to your phone in real-time, so you always know when money goes in and out. If your Chime Bank debit card was lost or stolen, you could instantly freeze it from within your app.
This is really useful if you lose the card, not least because you can simply unfreeze it if the card turns up. In a time not so long ago, you would need to call your bank straightaway to cancel the card, and wait for a new one to turn up in the post. This would be extra frustrating if you then found the card down the back of the sofa!
You will also benefit from the Visa Zero Liability that Chime Bank has partnered with. This means that you are protected in the event that your card is used fraudulently. If it is, you will not be responsible for the unauthorized charges.
When it comes to account access, Chime Bank offers two-factor authentication. This means that you need to confirm a PIN number that is sent to your mobile phone before you can log in. This is useful if you decide to log in via your desktop computer. Chime Bank also offers fingerprint ID as an additional safeguard.
Chime Bank Customer Support
One of the biggest pain-points faced by Americans in the traditional banking scene is that of customer support. Whether it’s long waiting lines in-branch or over the phone, customers are often left frustrated with the level of support provided. With that said, challenger banks are looking to capitalize on this short-fall by placing the customer experience at the heart of everything.
In the case of Chime Bank, the platform offers support via telephone and email.
- The support line can be reached at 844-244-6363.
- Emails should be sent to support@chimebank.com.
- You can also send an email from within your Chime Bank app.
The Chime Bank customer support team has an excellent reputation in the public domain. For example, it holds an ‘Excellent’ TrustPilot rating of 4.6/5, which is across an impressive 4,957 individual reviews.
Chime Bank Review: The Verdict?
If you’ve read our Chime Bank review all of the way through, you should now know whether or not the spending app is right for you.
Other than the availability of credit-based products like loans and credit cards, Chime Bank allows you to perform most of your everyday banking needs at the click of a button.
This includes the ability to send and receive money, have your wages paid in, and purchase goods and services with the Chime Bank debit card.
However, Chime Bank goes far and beyond just everyday banking. The app charges nothing apart from a $2.50 out of network ATM fee, and you’ll even get a $100 fee-free overdraft protection in case you overspend.
We also like the real-time purchase notifications that the app comes with, as well as the alleviation of foreign transaction fees.
Finally, with the FDIC protection that the app comes with, your money is 100% safe up to the first $250,000. All in all, Chime Bank is an excellent alternative to the status quo.
Chime Bank
Pros
- No Monthly or Overdraft Fees
- Free ATM Network
- Modern Alternative to Traditional Banks
- Get access to your direct deposits up to two days earlier
- Good Mobile App
Cons
- Fees on Cash Deposits
- No Physical Locations
- Low Savings Rates
