Chime Bank 2021 Review: Pros and Cons of Banking with Chime

We’re changing the way people feel about banking – that’s the Chime bank motto. Are they succeeding? Let’s do a deep dive into this banking service called Chime and see if they’re making it happen.

Chime Bank operates solely online. The bank is best known for a technology-driven banking experience and in our review, we found that its no-frills offerings are easy to understand regardless of your level of financial literacy.

Who is Chime Bank for?

Chime Bank will appeal to customers looking for an online-only bank. It’s perfect for people who:

• Like a modern, app-driven banking experience
• Don’t carry a high balance and appreciate having access to their paycheck the day it enters their bank account
• Have simple banking needs
• Need help with budgeting and saving

Accounts Offered by Chime Bank

Chime Bank offers the following types of accounts:

• Checking Account
• Savings Account

Checking Account

Chime bank calls its checking account a spending account. It’s free and easy to apply for. You will get a decision in two minutes or less.

Advantages include:

• No monthly fees
• No minimum balance requirement
• Access to 38,000 ATMs in the United States free from fees
• No foreign transaction fees

Because Chime doesn’t hold your paycheck as other banks do, you get instant access to your direct deposited paycheck up to two days earlier than some other banks.

Your spending account comes with a Visa Debit card accepted by any merchant that accepts Visa—so pretty much everywhere.

Your Chime debit card also works with mobile payment providers such as ApplePay, Google Pay, and Samsung Pay.

The Chime app allows you to instantly block your card if you suspect fraud and order a replacement card. No need to check your account daily or wait for a call to learn of possible fraudulent transactions.

You’ll receive an instant notification anytime your card is used, daily balance notifications, and other helpful push notifications.

However, Chime’s simplicity can sometimes work against you. Setting up direct deposit with Chime bank is easy but depositing cash requires you to visit a Green Dot cash deposit location. You may have to pay a fee for the service.

Although you can send checks through Chime’s checkbook feature, you can’t write paper checks. Checks through the Checkbook feature are limited to $5,000 per payment and a maximum of $10,000 per calendar month.

With Chime, you never have to worry about overdraft fees because there’s no way to spend more than you have. Chime simply rejects the transaction.

That’s good news for most but if you’re used to using your bank’s overdraft protection for a short-term safety net, Chime doesn’t offer it. Whether that counts as a downside to Chime is debatable.

Savings Account

Chime’s company vision is to make money when its customers make money instead of capitalizing on their misfortune.

To that end, Chime offers simple savings account along with a checking account to encourage saving over discretionary spending.

Anytime you make a purchase, Chime will round up your purchase to the nearest dollar and deposit the extra into your savings account. Did you spend $8.55 at lunch today?

Chime rounds it to $9 and the extra $0.45 goes into your savings account. Of course, this is an optional feature that you can turn on or off as you would like.

Also, you can have Chime bank automatically transfer 10 percent of your paycheck into your savings account to accelerate your savings.

The downside to the Chime savings account is the interest rate—or lack of it. You’ll earn a pretty close to useless 0.01 percent APY.

Earning $1 per year on every $100 you save means that you’re not remotely close to keeping up with inflation, so the value of your long-term savings is going backward.

That doesn’t mean that your savings account is useless. Consider using it to collect a certain amount and then transfer it into an investment product at another financial institution that earns you more.

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How to Open an Account with Chime

In order to qualify, you must be a U.S. citizen, and 18 years or older. The service is available only to those living in the U.S., who have a valid Social Security number.

To open an account, you start by entering your full name, email address, and password that you choose. You will also be required to verify your identity, which is a requirement when opening a financial account with any institution.

That will include providing your address, date of birth, Social Security number, and any other information that will help Chime to identify you. They may also ask for a copy of your driver’s license or other identifying documents.

Pros and Cons of Banking with Chime

Pros

Chime offers several features we like:

• No Fees: There are no monthly maintenance or overdraft fees.
• Automatic Savings: As noted above, Chime offers ways to automate savings. These features can help customers built an emergency fund or save for a specific goal.
• Faster Pay: Chime says you can get access to your pay up to two days earlier.
• No Overdraft Line of Credit: Chime doesn’t charge an overdraft fee because it doesn’t permit you to overdraft your account. If you lack the funds to cover a charge, Chime will decline it. Some might describe this as a disadvantage, but we list it here because it can help customers control spending.
• Split the Bill: Chime makes it easy to split the bill with friends and family on a night out.
• Mobile App: Chime’s mobile app has been well received, based on the iPhone and Android reviews we evaluated.
• Free ATMs: Chime offers over 38,000 fee-free ATM locations.

Cons

Nothing in life is perfect, and Chime is no exception:

• No Joint Accounts: Banking with Chime is not ideal for those wanting a joint account. It doesn’t offer them.
• Cash Deposits Take Work: Since Chime is an online-only bank, putting cash into your Chime account is an ordeal. You’ll need to go to a Green Dot cash deposit location, which may charge a fee of up to $4.95 to deposit cash.
• Out-of-Network ATM Fees: Although you will have access to over 38,000 MoneyPass ATMs, Chime charges $2.50 per transaction through an out-of-network ATM. There is also a three percent external debit charge (when you load your account via debit instead of a direct transfer).
• No Personal Checks: If you need to send a check, Chime will send one for you, though you are limited to $5,000 per payment and $10,000 in a calendar month. Also, your account must be open for at least 30 days before you can use this feature.
• Low-Interest Rates: Chime’s saving account offers a very low interest rate. Chime’s current rate is an APY of only 0.01%.

How does Chime Stack Up

1. Brick and Mortar Banks: The big advantage traditional banks have over Chime and online banks is a physical branch. If talking to your banker’s face to face is important to you, Chime is not the answer.
2. Online Banks: With an online bank, you typically get the best interest rates available on deposit accounts and low fees. If a competitive savings rate is your goal, then an online bank is the answer. If what you want is a no-fee checking account with automatic savings features, Chime is worth considering.
3. Mobile App Banks: Chime isn’t the only banking product to focus on the mobile app experience. Two others are Simple and Aspiration.

Chime is designed for those looking for a no-fee mobile bank with built-in features to help save and earn extra money.

If you are looking for more traditional bank perks, such as automatic bill pay, physical checks, interest-bearing accounts, joint accounts, or the option to have multiple checking/savings accounts, then Chime is not the optimal choice for you.

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