Chime Review: 6 Things to Know Before Opening an Account

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Chime Bank on a smartphone and desktop computer
Image Credit: Dreamstime

If you’re looking for online-only banking with no hidden fees, early direct deposit and fee-free overdrafts, you might want to give Chime a chance.

Here’s What You Need to Know About Chime

In this article, we’ll take a look at how Chime works, what sets it apart from competitors, how you can access your money and more.

But before we get started, here’s an overview of the pros and cons of Chime:

Pros Cons
  • No hidden fees
  • Early direct deposit
  • Fee-free overdrafts up to $100
  • Won’t deny you an account for past mistakes
  • High fees to deposit cash
  • No physical bank branches

Chime Review: Table of Contents

  1. What Is Chime?
  2. How Do I Open an Account With Chime?
  3. How Do I Withdraw Money From Chime?
  4. How Do I Add Money to My Chime Account?
  5. How Does the Early Direct Deposit Feature Work?
  6. How Do Fee-Free Overdrafts Work?

1. What Is Chime?

Chime offers a branch-less mobile banking experience for people who need to manage their money on the go.

Along with the convenience of a mobile-first banking strategy, Chime has eliminated a lot of hidden fees for its customers. You’ll never pay any of the following with Chime:

  • Monthly fees
  • Overdraft fees (up to $100)
  • Foreign transaction fees
  • And there’s no minimum balance requirement

FDIC insurance on deposits up to $250,000 is available through The Bancorp Bank and Stride Bank, both of which handle the money for Chime behind the scenes.

2. How Do I Open an Account With Chime?

There are two kinds of accounts you can open with Chime. The basic account is called a Spending Account and it comes with a Visa debit card. There’s also an optional Savings Account that currently pays 1.00% APY.

Opening an account with Chime is easy. You start by downloading the free app for Android or iOS.

Then you’ll just need to enter the following info:

  • First and last name
  • Email
  • Home address
  • Phone number
  • Date of birth
  • Social Security number

One of the nice things about Chime is that it’s a so-called “second chance banking option.”

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The banking industry has its own version of credit reporting that’s called ChexSystems. While not actually a credit bureau, ChexSystems maintains a database of info about closed checking and savings accounts. Banks will often consult with ChexSystems before taking on new clients.

If you have bad marks on your ChexSystem report from the past, you could be barred from opening a new account with a bank for up to five years.

But Chime won’t hold your ChexSystems report against you. You can open a new account with them even if you’re locked out of the traditional banking system because of prior mistakes.

In fact, around six percent of Americans are “unbanked” because they can’t get a bank account or don’t want one, according to recent numbers from the Federal Reserve.

Chime represents a good opportunity for those people who don’t have an account to get into the banking system, if they wish.

At the very least, Chime serving as a second-chance banking option is a big differentiator we here on Team Clark haven’t seen among a lot of the other bank offerings we’ve covered in the past.

3. How Do I Withdraw Money From Chime?

Chime gives you easy access to your money through the MoneyPass and Visa Plus Alliance networks. Taken together, these two networks boast more than 38,000 fee-free ATMs nationwide, according to Chime.

That means you’ll have access to ATMs at the following banking and retail locations:

  • 7-Eleven
  • Bi-Lo
  • Costco Wholesale
  • CVS Pharmacy
  • Get Go
  • Select banks
  • Select credit unions
  • Target
  • Walgreens
  • Winn-Dixie

Keep in mind that if you use a non-MoneyPass or non-Alliance ATM, you’ll be charged a fee by the foreign ATM’s operator. That’s in addition to a $2.50 fee Chime will charge you for using a foreign ATM.

4. How Do I Add Money to My Chime Account?

You can add money to your Chime account in one of several ways:

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  • Direct deposit from a payroll provider
  • Transfer from a linked external bank account
  • Mobile deposit of a paper check
  • Cash deposit

Unlike some online banks, Chime does give the option to do a cash deposit at more than 90,000 retail locations through GreenDot.

However, third-party money transfer services like this “may impose their own fees and limits on a per-transaction basis,” according to Chime.

5. How Does the Early Direct Deposit Feature Work?

When you’re with Chime, you have the opportunity to get direct deposit from your payroll provider up to two days early.

Best of all, this early direct deposit feature is easy to activate. Chime simply emails you a pre-filled direct deposit form to give to your employer to get the ball rolling.

early deposit with Chime Bank
Early deposit with Chime

Here’s the fine print on that promise of getting your pay up to 48 hours early:

“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.”

We should also note that Chime isn’t the only bank offering early direct deposit. We recently wrote about Varo Bank, which has the same feature.

6. How Do the Fee-Free Overdrafts Work?

Chime offers fee-free overdrafts of up to $100 on debit card purchases.

Using a proprietary system called SpotMe, Chime allows you to apply a future deposit against your negative balance with no fee.

Chime Bank SpotMe

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When you use SpotMe for fee-free overdrafts, you’ll be asked if you want to leave a tip to help “pay it forward.” However, there’s no obligation and you won’t be barred from using SpotMe in the future if you don’t leave a tip.

The only requirement to use SpotMe is that you have total monthly direct deposits of $500 or more.

Final Thought

Chime is likely to be a good option for you if you:

  • Are already comfortable with mobile-only banking
  • Want early access to your money each pay period
  • Can’t open a new account with a traditional bank because of past mistakes
  • Want to eliminate overdraft fees and other fees from your life

There’s one caveat we should mention: If you’re used to making cash deposits regularly, it’s likely going to be prohibitively expensive for you to have a Chime account. That’s because of those third-party fees assessed when depositing cash.

Ultimately, if Chime doesn’t work for you, another online bank might. Be sure to read our piece on the Best Online Banks to see what’s available.

Meanwhile, you may also be interested in our articles on the Best Free Checking Accounts and Best Savings Accounts.

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