Simple Bank Review: Simple is an option worthwhile that eliminates the fees most often associated with traditional banking to help customers feel more confident with their money. As there aren’t any fees here for account maintenance, overdrafts, or out-of-network ATM usage.
Simpleis an application that works with a bank and provides you the ability to manage your finances on its mobile app.
It’s perfect if you’ve had difficulty saving money in the past, and just need an effective service to get you moving in the right direction.
The Simple plan revolves around the creation of a goals-based checking account. If you’ve been unable to save money in the past, Simple will enable you to create savings goals that are a part of your regular budget.
You’ll have expenses to pay–which are also established as goals–but you’ll also have your savings goals. You’ll pay both every month, enabling you to build up your desired savings goal as you go along.
Founded in 2009, by Josh Reich and Shamir Karkal, Simple is a newly formed banking software that focuses on reaching financial goals through the creation and tracking of multiple savings goals via their website or mobile app.
You start by signing up for a free account, creating a new goal with a custom name/purpose, and then setting up automatic savings transfers starting at $1 or more.
In addition, they offer spending and budget tracking features that allow you to view spending habits to find holes where you could be saving more money.
Once you sign up for a free account, you’re given a Visa card that’s attached to your account. From there you get access to all their features, including micro-savings goals, and the best part is, it’s free.
Pros and Cons of Simple
No monthly fees or overdraft charges
No minimum balance requirements
Automated budgeting tools with your account
No high-yield savings accounts or CDs
No physical locations for cash deposits and other banking needs
You need $2,000 or more to qualify for a meaningful interest rate
Types of Accounts
Simple Checking Account
Protected Goals Account
Simple Checking Account
An online checking account is at the heart of Simple. The account, which I’ll call a spending account, is FDIC-insured and comes with a Simple Visa debit card.
This account pays no interest, although Simple’s Protected Goals Account does (more about that in a moment).
As with most checking accounts, customers can set up direct deposits. Simple offers more than 40,000 free ATMs. There are no monthly fees or overdraft fees (transactions that would overdraw the account are declined).
One potential drawback for some is the absenchttps://www.britannica.com/topic/Federal-Deposit-Insurance-Corporatione of checks.
Like many online checking accounts, Simple does not provide its customers with a checkbook. You can, however, pay bills online for free.
Simple’s bill pay feature will send checks on your behalf. Simple states that checks arrive at the payee in about a week. For large businesses, Simple will send money electronically.
Protected Goals Account
If you want to earn interest and leave your savings in a safe place, Protected Goals Accountshelps you do so. These accounts are ideal for emergency funds and high-priority savings goals. Technically, the account is not a savings account, but the functionality is similar.
Some features include:
Earning 2.02 percent APY if you have more than $2,000 in your Protected Goals Account
The ability to move money out of your primary Simple account so you’re not tempted to spend it
The option to move it back into your primary Simple account when you’re ready to spend your savings
Protected Goals Accounts are a relatively new feature. Like most things at Simple, they’re pretty straightforward, but these accounts will likely evolve in the coming years.
FDIC insurance up to the maximum amount allowed by law
Current Terms and Rates
Base rate without a Protected Goals Account: 0.01% APY
Rates with a Protected Goals Account:
$0.01 – $9,999.99: 1.75% APY
$10,000 and up: 1.90% APY
How does Simple Work?
Although Simple calls themselves a bank, all the funds in your account are held by their partner bank, BBVA Compass, Member FDIC. Your money is insured by BBVA Compass up to the FDIC maximum (currently $250,000).
Basically, they’ve partnered with BBVA Compass, which holds your funds so you can use their banking software for budgeting, goals, and bill-paying features.
They look and operate like a bank but still use a partner to process the transactions. Simple’s design is worlds apart from the other banking apps and websites out there.
How Does Simple Make Money
If they don’t charge any monthly fees? Simple makes money through interest and interchange. The majority of their profits come from the interest margin.
That is the difference between the amount of interest earned on the reinvestment of customer funds in the community and the interest paid to customers for their deposits held.
The second way they earn revenue is through the interchange, which refers to the card processing service charge that is paid by a credit network to an issuing bank when a card is swiped.
It’s no surprise that Simple bank’s largest target market falls in the range of 18-35-year-olds who are technology savvy.
However, they like to refer to their customers as “a group of people who want to interact with their money more intuitively through on-demand, mobile banking.
As Simple grows, we’re seeing our customer base spread across the US, with an age range that spans from 18-82.”
Opening an Account With Simple Bank
To open an account with Simple, you should have a mobile device with the specifications described earlier. But you must also have a computer capable of running a modern web browser, like Internet Explorer 11, Safari 7+, Chrome 37+, or Firefox 32+.
Though it is possible to use the app using the web application only, the best use of the service requires a mobile device.
To open a Simple account, you must be aU.S. citizen, over 18 years old, and with a valid Social Security number.
Accounts can be either individual or joint (through Simple Shared). With joint accounts, each partner has a separate account, with each connected to the shared account.
You open the account using a simple four-page application.
One the first page, you’re asked to create a username and password, enter your email address, and indicate what you plan to use the account for (cash, checks, domestic wire transfers, international wire transfers, domestic ACH transfers, or international ACH transfers).
On the next screen, you enter your full name, address, occupation, and source of income. You’ll then be asked to provide your phone number so that Simple can send you a code to verify that number and grant you access to the remainder of the application.
On the third page you are required to verify your identity, then finally review and submit the application from the fourth page.
The entire application process takes only a few minutes to complete.
Is Simple Bank Right for You?
Choosing which bank to trust with your money is a major decision. While Simple Bank is a relatively new financial institution, it has a lot of upsides. The bank’s budgeting tools and high interest rates are certainly worth considering.
That said, if you’d like to be able to go inside a brick-and-mortar location, you want to earn a lot of interest without having to maintain a minimum balance, or you get paid in cash and want a way to deposit it, you’ll need to look elsewhere.
I hope this post has helped set the record straight on Simple Bank. If it all sounds good, give it a whirl. Who knows? Simple’s high interest rates could end up becoming a critical tool that helps you achieve financial independence.
1. Is Simple Bank a Real Bank?
Yes. Simple is a real bank that offers online checking accounts and budgeting tools. The company does not have any brick-and-mortar branches, but most transactions can be conducted through Simple’s mobile app. If you want to deposit cash, however, you will need to jump through a few hoops.
2. Why does Simple offer a checking account with no checks?
Simple is free service. Offering checks would raise the company’s expenses, and likely eliminate the free component from the equation.
3. Is Simple Bank FDIC-Insured?
Yes. Simple is FDIC-insured through its partner BBVA USA. That means that deposits of up to $250,000 are guaranteed by the federal government.
4. What Bank is Simple With?
Simple is owned and backed by BBVA USA. BBVA is an abbreviation for Banco Bilbao Vizcaya Argentaria, which is the 42nd largest bank in the world—and the second largest bank in Spain.
5. How Does Simple Bank Make Money?
Simple earns money from transaction fees that accrue every time you use your Simple Visa Debit Card. Simple’s parent company, BBVA USA, earns the bulk of its revenue as a traditional bank. As such, BBVA USA earns revenue from credit cards interest and fees, mortgage loans, and more.
Simple is as its name implies, simple. This bank suits consumers who are looking to save money and to understand how their money works and how banks operate.
It’s also a great online bank for those who have never had an account before. Simple is not for consumers who value the cashback and reward points offered by major banks.
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