Chime Bank Review: Just the Basics

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Chime Bank Review: Just the Basics

Chime is a digital bank that offers a streamlined experience for users who just need the basics.

Good for

  • Free online banking with basic checking and savings
  • Mobile app offers anytime account management
  • Early direct deposits enable faster access to income

Bad for

  • Only checking and savings currently available
  • Low savings account interest rate
  • Cash deposits not accepted

Editor's Rating

4.0/5.0

Chime is an online bank that provides free checking and savings accounts accessed via mobile app or web browser. Besides helping you avoid typical bank fees, Chime comes with useful new options like early direct deposits and automatic saving. While you won't find products like credit cards or loans available at Chime, it's still a cost-effective alternative for anyone who just needs basic checking and savings.

Summary: What Does Chime Offer?

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At their core, Chime's account features replace branch-based banking with a more agile web-based experience. Instead of having to visit a physical bank to manage accounts, Chime users can carry out all the same tasks from the company's website or mobile app. Activity monitoring, direct transfers, and mobile check deposit are all available through Chime's Spend Account.

However, the rapid improvement of banking technology means that most banks now offer the basic capabilities listed above. Chime stands out by adding a few new ideas to the mix. These include an Early Direct Deposit feature, which makes your paycheck funds available as soon as your employer makes the deposit—a potential difference of two days. Chime's optional Savings Account also comes equipped with features to automate your saving.

The main downside to Chime is one faced by users at many other online banks: there's no way to deposit cash into your account. This limits Chime's audience to those who get paid electronically or by check. It's also less than ideal if you want products other than just checking or savings. Chime's current offerings are limited to online checking and savings, but the company is working to roll out a credit card—and other products are likely to follow.

Details: Chime Features and Fees

Currently, Chime's services consist of a checking account—the "Spending" Account—that's connected to the Chime app as well as a Visa debit card, which is mailed to new customers. The company also offers an optional Savings Account, which earns 0.01% APY and can be managed alongside your Spending Account within the app.

Chime App Features

Spend Account FeaturesSavings Account Features
  • Deposit checks with your smartphone
  • Enable or disable debit card with a single button
  • Send P2P payments or link with Venmo
  • Locate nearby ATMs for free withdrawals
  • Request checks be written and mailed
  • Save automatically by rounding debit transactions up to nearest dollar
  • Set up automatic 10% transfer of every paycheck to Savings

The debit card can be used normally for purchases and free ATM cash withdrawals, but Chime's best feature is its mobile app. The Chime app lets you manage all your banking from a smartphone, whether you feel like going over your recent debit purchases, paying friends by Venmo, or making a mobile check deposit. Combined with Chime's paperless statements, this effectively eliminates paperwork and signatures from your daily banking experience.

Besides the typical features you'll find in other banking apps, Chime includes rarer options that increase the account's convenience and safety. The Early Direct Deposit program offers faster access to your paychecks, making it easier to stay on top of bills. And when you lose your debit card, the Chime app can be used to disable it in a single press—or turn it back on when you find it lodged between the sofa cushions.

For skeptics of online banking, it's important to note that Chime provides government-backed FDIC insurance on all of your deposits, just like any brick-and-mortar bank. It achieves this by partnering with The Bancorp Bank, an FDIC member institution that holds the money placed into Chime accounts on behalf of the app's users.

Fees and Limits

On the whole, Chime is very low-cost relative to other banks. The only fee is a standard charge of $2.50 for ATM transactions that you initiate at machines that aren't part of the bank's partner networks, which are MoneyPass and Visa Plus Alliance. As with any other bank, you're also responsible for paying any additional operator fees charged by the ATM owner.

Transaction TypeDaily Limit
ATM Withdrawal$500
Cash Back at Points-of-Sale (POS)$500
Over the Counter (OTC) Withdrawal$500
Card Purchases (Signature and PIN)$2,500
Daily Limit refers to 24-hour rolling timeframes

Chime's daily limits on spending are fairly low, but similar to those on standard brick-and-mortar accounts. There is a combined daily limit of $2,500 on card purchases, cash back, and ATM or OTC withdrawals. Further restrictions exist for each category of spending, with no more than $500 in withdrawals allowed per method—see the chart above for a detailed breakdown.

Besides limiting withdrawals, Chime also limits transfers into your Spending Account. When using the Chime app, you can't transfer more than $200 per day and $1,000 per month into the account. This can be severely limiting if you want to use Chime alongside your accounts at other institutions. Fortunately, you can easily sidestep Chime's restriction by initiating your transfer from your bank's app or web service.

Review: Who Should Join Chime?

Chime is a good option for anyone who's willing to replace their costly brick-and-mortar bank in exchange for online-only banking. So long as you're comfortable with the idea of managing your daily finances with just an app or website, Chime is a good way to avoid fees like overdraft or monthly maintenance.

On the other hand, Chime is new and has yet to deliver a comprehensive set of financial products. While it appears quite easy to link Chime to your other financial accounts, the fact remains that it's not a full substitute for Chase or Bank of America, where you can access more complex products like investments and mortgages. If you value a frictionless all-in-one solution, you may need to wait for Chime to expand into other products before considering a switch.

Finally, Chime's low daily transfer limit and no-cash deposit policy pose problems for two different groups of potential users. The bank's inability to process cash deposits is a dealbreaker for the small percentage of workers who don't get paid by check or direct deposit. While the lack of cash deposits is common among online banks, Chime's low in-app transfer limit is more unusual. You can avoid the limit by using your other bank's app to make transfers, but it still reduces Chime's usefulness if you don't plan on setting up direct deposits to the Spending Account.

Compare: Chime Versus Other Options

Chime is only one of several fintech companies working on a digital platform for banking services. This leaves consumers with a raft of similar options dressed in a dozen different names. To help you choose the right one, we compared Chime to a few standout competitors on a case-by-case basis.

Chime vs. Simple

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Simple is a similar competitor to Chime: an online app-based banking experience complete with debit card and FDIC insurance for deposits. While both offer smooth and convenient banking, Simple brings several advantages to this matchup. Simple's Protected Savings Account earns a much stronger 2.02% APY, while its higher limits on in-app transfers make it easier to move funds into Simple compared to Chime.

Chime's one advantage over Simple is its Early Direct Deposit feature, which ensures you'll receive your funds a few days more quickly than usual. Aside from the difference in interest rate, the two banks come out even in terms of savings tools: both Simple and Chime have their own methods of encouraging steady, automatic transfers into your savings balance.

Chime vs. Ally

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Ally Bank is one of the major established online banks, which means that it offers a more comprehensive line of financial products compared to the newer Chime. If you're considering adding a credit card, auto loan or mortgage to your financial picture, Ally offers solutions in each area. All these products are delivered in a robust Ally app that gets the job done, even if isn't as sleek as Chime's.

Finally, both the Ally Interest Checking Account and Online Savings Account earn a stronger rate than Chime's Savings Account. Choose Ally if you value interest rate and access to all-in-one financial services; try Chime if you prioritize a great app experience, early direct deposit and automatic savings features like the debit card round-up.

Chime vs. Varo

On the surface, there are quite a few similarities between Chime and Varo. Both provide online banking with Visa debit cards, large third-party ATM networks, early direct deposit, and no monthly fees. The two companies even partner with the same FDIC-insured institution for their deposits. However, Varo promises a number of additional features that make it a more capable financial management tool than Chime in its current state.

These extras include a competitive savings account rate of 1.75% APY and the ability to link all of your credit cards and other accounts in the Varo app for easy viewing. Bill pay and a 30-day cash flow summary allow you to understand and master your monthly expenses. And in some states, Varo also offers personal loans. The only downside: Varo is only available on iOS, and its daily transfer limits are even lower than those at Chime.

Chime vs. Acorns

Acorns is a significantly different app than Chime, with a heavy focus on investing small amounts that accumulate over time. It's also a subscription service that costs between $1 and $3 as of this writing, which further sets it apart from Chime's no-fee banking app. With each additional dollar you pay Acorns, you get access to investment, retirement, and checking accounts.

If all you need is a low-cost, convenient banking experience, we recommend you go with Chime over Acorns. If you're interested in spending $12 to $36 per year on an integrated suite of financial products, consider paying for Acorns. The central premise of each package at Acorns is that the app will help you build up your balances bit by bit, with automatic daily contributions.

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