Chime Bank Review: Fee-Free Banking (2021 Update)

Bank fees can be frustrating. Luckily, online banking platforms that offer free checking and savings accounts can help you avoid unwanted fees.

Online-only institutions also typically offer free ATM access, fee-free overdrafts, and other features that make it easy to manage your money.

If you want a bank that is light on fees without sacrificing features, this Chime Bank review covers why they are a great option for your needs.

What Is Chime Bank?

Chime isn’t a traditional bank with physical branches. Instead, it is a financial software company operating as a neobank with FDIC-insured accounts.

A neobank has fewer expenses than a regular bank, allowing you to enjoy more benefits at a lower cost.

The financial institution operates entirely online and has the backing of The Bancorp Bank and Stride Bank. These two companies perform banking services for numerous banks nationwide.

Your account has up to $250,000 in FDIC Insurance. This is the same coverage amount as traditional banks.

Chime Bank Accounts

The online bank offers three main account types, including a spending, savings, and Credit Builder account.

Spending Account

When you join Chime, you automatically get a Spending Account. Essentially, this is a free checking account with no monthly fees or balance requirements.

Some of the features include:

• A Visa debit card
• Direct deposit
• Online bill pay
• Sending money to non-Chime customers for free
• 60,000+ fee-free ATMs

Even though this account is for an online-only bank, the institution offers checks via their Chime Checkbook feature. You don’t physically write a check, but they send one for you if requested.

This feature is free of charge, and there is no limit on the number of checks you can send each month. They also offer mobile deposits.

Unfortunately, this account doesn’t earn interest or offer a joint account option.

Savings Account

This app-based bank offers a high-interest savings account that earns a competitive interest rate.

As of August 26, 2021, your entire balance earns 0.50 percent APY.

Similar to other high-yield savings accounts with the best online savings account rates, current federal regulations limit you to a maximum of six transactions per month.

Once again, there are no account fees or minimum balance requirements.

There are three ways to fund this account, including:

• One-time transfers from your Spending Account
• Chime debit card spending round-ups
• Transferring 10 percent of direct deposits of $500 or more

This account is optional but easy to open. Since it earns a high yield and is FDIC-insured, Chime can be the only online bank you need for saving money and making purchases.

Credit Builder

Chime also offers a credit card. You can request a free Credit Builder secured credit card to build credit.

Each monthly payment reports to the three credit bureaus, allowing you to improve your credit score.

Unlike most credit cards, this product doesn’t:

• Charge an annual fee
• Have purchase APR interest charges
• Require a minimum security deposit
• Perform a hard credit check during the application process

To qualify for this card, you need at least $200 in monthly direct deposits.

While you won’t have to make a security deposit to open an account, your card spending limit is the amount of money your transfer to your Credit Builder account.

The Available to Spend money management feature displays how much of your card balance remains for future purchases.

Features

Chime Bank has an impressive list of benefits that appeal to most customers.

SpotMe

The SpotMe feature allows you to make debit card purchases even if it overdraws your account. This internet bank won’t charge you any overdraft fees when you enroll in this program.

To qualify for this feature, you must receive at least $200 per month in direct deposits. Qualifying deposits include employer paychecks and government benefits.

Your initial overdraft limit is $20. This means that you can’t go over more than $20.

After your account history and usage grows, you may qualify for up to $200 in benefits.

If you overdraft, the bank deducts the negative balance from your next deposit, and you won’t pay any fees. However, you can pay an optional tip when you use this service.

Most banks require you to open a separate line of credit account that assesses fees to have a similar feature.

Early Access to Paychecks

Depending on your employer, you may receive your direct deposits up to two days earlier than the scheduled deposit date.

How soon you receive your check depends on when the party submits payment.

Round-Ups

One of the best tips to save money is to save in small amounts whenever possible. The Round-Ups feature can increase each debit card purchase to the next dollar and transfer the extra amount to your savings account.

For example, if you buy gas and your total is $33.47, Chime will automatically round up to the nearest dollar ($34). The change, equaling $0.53, is then transferred to your savings account.

Keep in mind that if you choose this feature, it will apply to every purchase you make.

Additionally, you can ask Chime Bank to automatically save up to ten percent of your direct deposit paycheck by putting it into your savings account.

Split the Bill

You can send money to another Chime online account or to friends at another bank free of charge. This feature makes it easy to split purchases.

The mobile app also gives you the option to request money from friends who also use the financial app.

Your friend will receive a text message for the request, and you instantly receive the funds when they send payment.

Bill Pay

Mobile banking is easy when you have free bill pay.

You can pay bills by providing merchants and utility companies with your debit card or checking account details.

What makes Chime Bank different from some of its competition is its ability to send checks to companies that won’t accept debit payments or bank transfers.

While you can’t write paper checks, this bank will mail unlimited checks on your behalf if the person can wait several days to receive payment.

Fee-free ATM Network

Chime Bank has over 60,000 ATMs offering free ATM withdrawals.

The free ATM network includes these partners:

• Allpoint
• Visa Plus Alliance
• Moneypass ATMs in 7-Eleven locations only

It’s also possible to withdraw money at cash back locations like Walmart, CVS, and Target. However, fees may apply.

You can find the fee-free ATMs in the mobile app when you need cash. The daily withdrawal limit is $500.

If you do use an out-of-network ATM, the fee is only $2.50. This is cheaper than most ATM fees.

In addition to withdrawing cash, you can make cash deposits at GreenDot kiosks at over 90,000 stores. A transaction fee will apply.

What Fees Does Chime Bank Charge?

Chime is a fee-free online bank for most customers.

Some of the fees you may encounter include:

• Out-of-network ATM withdrawals: $2.50 per transaction
• Cash withdrawals at stores: Varies (potentially free)
• GreenDot cash deposits: Varies
• Load an external debit card: Three percent

You won’t pay these fees with any Chime online account:

• Account service fee
• ACH transfer fee
• Card replacement fee
• Foreign transaction fee
• Overdraft fee
• Sending money to friends
• Bill payments

If you don’t mind using an internet bank, Chime is a good solution to avoid unnecessary fees.

How Does Chime Bank Make Money?

There are several ways the platform makes money so it can continue to offer fee-free banking.

Some of the income streams include:

• Transaction fees from Visa card purchases
• Out-of-market ATMs
• Tips from the SpotMe feature

The debit card and credit card interchange fees are the primary way this online bank makes money.

Additionally, the bank uses the fees to cover overhead expenses instead of passing on some of the fee income as cash back rewards when you make a purchase.

Pros and Cons

Here are the advantages and disadvantages of using Chime Bank.

Pros

• No hidden fees
• FDIC-insured up to $250,000.
• Free ATM withdrawals at over 60,000 ATMs
• Mobile-friendly way to send money and pay bills
• Free overdraft protection
• High-yield savings account
• Secured credit card with no annual fee

Cons

• Online only with no physical branch access
• No rewards on debit card purchases
• Cash deposits at GreenDot locations only and fees apply
• Reduced customer service by app, email, and phone only
• $2.50 transaction fee for non-network ATMs

If you don’t mind using an internet-only bank and want to avoid fees, Chime may be a good fit for your needs.

Competitors

When choosing a bank, consider your needs, including branch access, account types, fees, and rewards.

If you don’t think Chime is right for you, these banking alternatives may offer better features for your money goals.

CIT Bank

CIT Bank offers free online-only checking and savings accounts. The minimum initial deposit is $100 for each account, but there is no ongoing balance requirement.

Some of the overlapping features include free ATM access, online bill pay, and competitive interest rates.

CIT Bank also provides a wide array of products, from money market and business accounts to lending products.

Read our CIT Bank review to learn more.

OnJuno

OnJuno offers a rewards checking account. Your first $5,000 account balance can earn interest, and debit card purchases at participating stores can earn up to five percent back.

Customers also have access to 85,000 fee-free Allpoint and MoneyPass ATMs.

When you have at least $500 in monthly direct deposits, you can upgrade to a premium account that includes additional benefits.

BBVA (Now PNC)

BBVA Compass is in the process of joining PNC Bank. You may consider this option if you need local branch access with competitive features.

If you want a full-service bank with products from mortgages to investing and credit cards, this may be a good fit for your needs.

Bottom Line

Chime Bank is an excellent choice for people who are looking to manage their money on the go. The app is easy to use, and the institution offers a lot of helpful features.

Having online banking that is virtually fee-free sets them apart from other banks, especially if you want an online checking and savings account.

If you don’t need local branch access, this service makes it easy to manage your money and earn interest while avoiding bank fees.

 

How much do you pay in fees at your bank? 

*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.