If you’re looking for an online-only bank with no hidden fees, early direct deposit and fee-free overdrafts, you might want to give Chime Bank a chance.
In this article, we’ll take a look at how Chime Bank 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:
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Chime Bank 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 Bank has eliminated a lot of hidden fees for its customers. You’ll never pay any of the following with Chime:
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.
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 1.60% APY.
Then you’ll just need to enter the following info:
One of the nice things about Chime is that it’s a so-called “second chance banking option.”
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 Bank 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 Bank 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.
Chime Bank 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 Bank.
That means you’ll have access to ATMs at the following banking and retail locations:
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.
You can add money to your Chime Bank account in one of several ways:
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.
When you’re with Chime Bank, 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 Bank simply emails you a pre-filled direct deposit form to give to your employer to get the ball rolling.
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.
Chime Bank offers fee-free overdrafts of up to $100 on debit card purchases.
Using a proprietary system called SpotMe, Chime Bank allows you to apply a future deposit against your negative balance with no fee.
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.
Chime Bank is likely to be a good option for you if you:
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.
This post was last modified on February 25, 2020 12:29 pm
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