Chime Checking Account Review

Chime Bank

7.5

Overall

7.5/10

Strengths

• Automatic rounded up savings transfers
• No fees
• Fee-free overdraft up to $200
• No minimum balance
• 60,000+ fee-free ATMs

What if I told you there was an award winning mobile checking account and debit card that combines the features of a high yield online savings account with the automatic savings of a micro-savings app?

That’s Chime. If you were building an account from the ground up, these are the features people care about.

Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. Please see back of your Card for its issuing bank.

Who is Chime?

Before we get ahead of ourselves, let’s get the basics out of the way first.

Chime white-labels the banking services of The Bancorp Bank and Stride Bank, N.A., Bancorp is the same company that runs the banking services for a litany of private label banks. The Bancorp Bank is FDIC #35444 and has been actively insured by the FDIC since July 2000.

By “white-label” what I mean is that all the legal aspects of running a bank are handled by Bancorp Bank (NASDAQ: TBBK), Chime layers their services, their app, etc. on top of what Bancorp Bank offers. While it uses the banking services of The Bancorp Bank, Chime builds its features and perks on top of the engine they provide.

The Bancorp Bank powers 100+ private-label non-bank partners and processes $232 billion annually. They’re a publicly-traded company and you’ve probably never heard of them because they run behind the scenes of other banks. They’ve been around since 1999, are FDIC insured, but have zero branches. They’re entirely private label.

What does Chime offer?

Chime offers a checking account and an optional savings account, as well as a Chime Visa® Debit Card. A Chime Checking Account is required to be eligible for a Savings Account. There are no monthly minimum balance requirements, no monthly fees, and fee-free overdraft up to $200¹, as well as a fee-free ATM² network that includes over 60,000 locations.

When they first launched, the Savings Account didn’t offer much in terms of interest but that has changed. As of July 2022, the annual percentage yield on the Chime Savings Account is 2.00% APY.³

One other nice feature – early access to your paycheck.  Some banks hold it a couple of days, for “processing,” but with Chime, when you set up a direct deposit, you can get your paycheck 2 days early.⁴

If you enable the Automatic Savings features, they round up every debit card transaction and transfer that money from your Checking Account into your Savings Account.⁵ You can also enable automatic transfers of 10% of every paycheck into your Savings Account.⁵

Finally, if you’re looking to build credit history, the Secured Chime Credit Builder Visa® Credit Card is an option for those who have received a qualifying direct deposit to their Checking Account⁶ and want or need to build up their credit  history.

Chime offers a mobile check deposits feature that you can unlock if you have direct deposit setup via their app.⁷ All other banking features you’d expect are in there (including bill pay electronically as well as the mailing of a check since they don’t provide checkbooks to their members).

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Pros and Cons

Chime used to offer $5 to open an account but no more, it’s not as nice of an incentive anyway compared to the hundreds of dollars some banks will give you. Getting your paycheck up to two days early⁴ with direct deposit and fee-free overdrafts up to $200¹ are good perks.

They also don’t offer some familiar deposit products like Certificates of Deposit or loan products like a mortgage or car loans. No biggie though.

They have a network of 60,000+ fee-free ATMs² that you can use… but go outside of it and you may be charged an out-of-network ATM withdrawal fee.

Who is Chime for?

If you want a simple, straight-forward account with automatic savings, no account fees, and a debit card – Chime does this.

They get good marks on their app and their user experience.

Considering they don’t charge you monthly fees, they’re an attractive option if you like automatic savings but don’t want to pay $5/mo to the likes of Digit (depending on how much you save, you could be surrendering that in interest).

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Chime Alternatives

Once you take away the rewards, Chime becomes an online checking account that deposits your paycheck up to two days earlier⁴ with direct deposit.

If I needed to pick a primary checking account, I’d rather open an account at Ally Bank, get 4.20% APY on my savings account, and just get my paycheck as normal. Ally Bank has no minimums, no maintenance fees, and has an app that lets you do everything you need (like deposit checks through the mobile app).

If you really want a microsavings app, you could give Acorns a try. They play more on the investing side and they have fees, but they’re worth a look.

Here are a few other alternatives to Chime in case those don’t attract you.

Disclosures:

¹ Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Friends transfers, or Chime Checkbook transactions. See Terms and Conditions.

² Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

³The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of <date w/in 3 months>. No minimum balance required. Must have $0.01 in savings to earn interest.

⁴Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

⁵Round Ups automatically round up debit card purchases to the nearest dollar and transfers the round up from your Chime Checking Account to into your savings account. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.

⁶To be eligible to apply for Credit Builder, you need to have received a qualifying direct deposit of $200 or more to your Checking Account within 365 days of your Credit Builder application. The qualifying direct deposit must have been made by your employer, payroll provider, or benefits payer by Automated Clearing House (ACH) deposit. Bank ACH transfers, Pay Friends transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, and cash loads or deposits are not qualifying direct deposits.

⁷Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.