Chime Bank Review 2019: Is It the Right Bank for You?

Does Chime Bank's simple approach work?

Bank accounts often feel like they’re a lot more complicated than they need to be. While plenty of banks might be competing to see who can offer the most products, a majority of banking customers are just looking for a place to deposit their paychecks and use their debit card. Not to mention, the Byzantine network of fees many banks charge can start to feel more like an elaborate trick than a consumer product.

One online bank, however, is opting to keep things simple — including the elimination of any and all fees. Chime Bank offers customers a chance to get the most basic functions of a bank account without the unexpected fees. What’s more, Chime customers can get their paychecks deposited up to two days early — pending their employer’s approval — helping make those tricky periods between paychecks just a little easier to manage.

Here’s a guide to different pieces of this review:

Who Is Chime Bank Best For?

Chime touts “a banking app built by a tech company” that offers intuitive and easy interface with your money. If you’re digitally savvy (or at least not a major technophobe) and want a bank account that keeps things simple and affordable, Chime might be right in your wheelhouse.

Families on the lower end of the income scale could also see a lot of utility — be it from the bank’s elimination of fees to the ability to access your paycheck a couple of days before it hits your account. If becoming a Chime Bank customer ends up being the difference between you needing to take out a pricey payday loan to cover an unexpected cost, it’s likely well worth it. Not to mention, customers will avoid ATM fees at any of the 38,000 ATMs that are a part of MoneyPass or Visa Plus Alliance — which can be found with the ATM locator in the Chime app.

Pros and Cons of Chime Bank
ProsCons
Options for accessing your paycheck up to two days earlyNo physical locations
Easy-to-use mobile appLimited number of available products
No fees for basic banking$2.50 fee for out-of-network and over-the-counter withdrawals
Options for automated savingCash deposits not accepted at ATMs

Find Out: How to Open a Bank Account Online

Who May Want to Skip Chime Bank?

If you’re looking for a checking account that’s going to offer everything a typical checking account will, keep looking. Chime Bank doesn’t have any physical locations, doesn’t offer options for CDs or money market accounts and doesn’t let you write checks from your account (instead, the company has an “online checkbook” that allows you to send checks via mail).

Chime Bank’s Strengths and Weaknesses
Best for: Worst for: 
Those interested in easy, intuitive mobile bankingBuilding savings long term through interest income
People living paycheck to paycheckCustomers frequently writing checks in person
Customers who have trouble avoiding fees at other banksPeople who prefer visiting a physical location or using cash
People with very basic banking needsConsumers looking for a wide variety of banking products

In addition, cash deposits are only possible using the Green Dot network at various retailers — a process that can come with fees.

Types of Accounts Available

Chime keeps it very simple, offering just a checking and savings account. Discover how Chime’s options compare with competitors below:

Chime Bank Accounts, Features, Rates and Comparisons at a Glance
AccountsSavingsSpending (Checking)
Fees$0$0
RatesStandard APY of 0.01% on all balance tiersNo interest earned on Chime Spending Accounts
Comparison
  • Ally Bank: 1.90% APY for all savings account balance tiers
  • Bank of America: 0.03% APY; up to 0.06% APY for Preferred Rewards customers
  • Ally Bank: 0.10% APY for checking account balances under $15,000 and 0.60% APY for account balances above $15,000
  • Bank of America: 0.01% APY for account balances of $50,000 or less; 0.02% APY for account balances above $50,000

Online Savings Account

The savings account option from Chime is quite simple. The major selling point for the account is its automatic savings features. Additionally, you can activate a feature that will automatically round every purchase on your debit card up to the nearest dollar and then deposit that additional amount into your savings — this works very similar to the round-ups feature offered by micro-investing app Acorns. For someone who is looking for new ways to save, that sort of automation can be a life saver.

While the Chime savings account comes with some interesting features, it also comes with one pretty massive drawback: a pitifully small interest rate of 0.01% APY. Granted, one overdraft fee can often erase years — even decades — of interest earnings, but 0.01% APY might as well be zero for all intents and purposes.

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Spending Account

Chime refers to its checking account as a “spending account” and offers a few features that are likely to excite some and underwhelm others. The ability to access your paycheck up to two days early might prove to be an essential feature for plenty of people. However, it’s also important to note that there are limitations on this service — most notably that you’ll need an employer that offers direct deposit and is willing to opt-in to Chime’s early direct deposit feature.

There’s also a feature called SpotMe — Chime’s iteration of overdraft protection. Chime will essentially allow you to overdraft up to $100 without charging a fee. You’ll then have a negative balance until your next deposit, at which point Chime applies a portion of that deposit to make up for the negative balance. You are then given the option to “tip” Chime as a way of “paying it forward” to other customers in need. It’s important to note that you must have regular direct deposits of at least $500 a month to access the SpotMe feature.

See: What Is a Money Market Account?

Another feature — or bug, depending on your perspective — is the Chime Checkbook. You won’t have the convenience of being able to write a check in person and hand it off to someone else, which might be a deal breaker for some people. However, for those deeply ensconced in the digital banking revolution, you might actually prefer Chime for this. You can log into your account online and fill out a form to have Chime mail a check to the eventual recipient — allowing for people to make use of checks when they’re the only payment option. That said, you’re limited to $5,000 per payment and $10,000 per calendar month, and the service isn’t available until you’ve had your Chime account for 30 days.

On the whole, if you use your bank in a more traditional manner, Chime’s spending account isn’t geared towards you. Cash deposits are more difficult, and you’ll need to log online to write a check. However, for customers eager for the speed and convenience of a mobile app, the ease with which you can handle so much of your banking digitally is likely to make Chime more appealing.

How to Bank With Chime

You can start your Chime account by downloading the bank’s app to your mobile device or visiting the website. There’s no minimum balance — and given that you don’t have to worry about fees — there’s more opportunity to start small.

Mobile App

One of the main aspects of Chime Bank’s service is the ease and simplicity of its mobile app. Chime proudly calls itself a tech company and promotes its app as being especially intuitive and simple, allowing you to manage your money quickly and simply, even when on the go. You should be able to make fee-free payments to friends, deposit a check or even put a freeze on a lost debit card all right from your phone.

Deposits and Transfers

Signing up for direct deposit with Chime is essentially just like it would be with any other bank. You’ll get a Chime routing number and spending account number when you set up your account, and you’ll simply need to supply your employer with both to set up regular transfers. A regular direct deposit is a necessity to qualify for the early pay option. You can also use the same routing and spending account numbers to set up a transfer to your Chime Bank spending account.

In addition, you can deposit paper checks via the Chime app using its mobile check deposit feature. Simply take a photo of the check on your phone through the Chime app, and deposit it into your account.

Up Next: How to Deposit Cash to an Online Bank Account

Fees

The absence of fees is one of the major selling points of Chime. While you have to weigh that against their very low APY on savings accounts, the typical cost of bank fees can be so high that it will more than make up for accumulating less interest. That said, there is one fee associated with Chime Bank — a $2.50 charge for using out-of-network ATMs and making withdrawals at banks and credit unions (referred to by Chime as “over-the-counter withdrawals”).

Learn More: 10 Best Online Banks of 2019

Summary

Chime Bank is clearly targeting a certain kind of customer with its offering. The online bank is set up to appeal to people who enjoy a combination of simplicity and flexibility that will allow them to make payments quickly and easily — either with their debit card or via direct payment to friends and family.

That’s likely to appeal to a lot of people who are already familiar and comfortable with banking online and haven’t seen a lot of use for the wide variety of different banking products on offer at more traditional options.

And even if you don’t see a lot of appeal in the extra features, the lack of fees alone could make it the bank for you. If you really prefer a physical location and writing checks, you might still see some appeal in not having to pore over statements to figure out why you’re getting charged fees.

That said, more traditional customers are likely going to pass unless they feel like they’re really getting hammered by fees elsewhere. If Chime’s features like automatic saving or getting your paycheck early aren’t a big sell for you, there’s likely not a lot that will attract you to the bank. Especially when you consider the low 0.01% yield on its savings account. Likewise, if you’re not getting hit with many fees or charges by your bank, giving up the chance to write checks yourself and earning almost nothing on your savings probably isn’t going to carry much appeal.

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About the Author

Joel Anderson is a business and finance writer with over a decade of experience writing about the wide world of finance. Based in Los Angeles, he specializes in writing about the financial markets, stocks, macroeconomic concepts and focuses on helping make complex financial concepts digestible for the retail investor.