These days we live in a digital world, so it’s no surprise that much of our banking has moved online. With the rise of digital payment services such as Venmo, Apple Pay and Cash, we have fewer reasons to write personal checks. Quick, digital payments are also becoming common at retail checkout counters.

As digital transactions become the norm, it’s little wonder that online-only financial services like Chime are stepping up to meet a new type of banking customer. In this review, we’ll take a deep dive into Chime’s mobile banking service and explore the pros and cons of the associated Chime app. (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.)

Chime Mobile Banking Overview

Chime follows in the footsteps of long-tenured online banks such as Ally and Charles Schwab‘s banking arm with no brick-and-mortar locations. What makes Chime different, however, is a focus specifically on users with simpler banking needs. The bank’s website, app and marketing materials have a fun, relaxed tone, which may appeal to younger users opening their first bank accounts.

Unlike competitors such as Ally and Schwab, Chime offers just three services: a spending account, a savings account and a Visa debit card. The spending account takes the place of traditional checking accounts and is linked with the provided Visa debit card. This card can then be added as a payment source for digital payment apps and can be used to draw cash from ATMs. Chime is partnered with MoneyPass and the Visa Plus Alliance, so withdrawals from any of these 38,000 ATMs nationwide are free.

Chime’s stated mission is to “help members get ahead by making managing money easy.” Part of this simplicity is achieved by removing nearly all of the typical fees usually associated with banking. There are no annual fees, no minimum balances and no overdraft fees. Chime accomplishes this fee-free model by only taking a percentage of the processing fee charged when the Visa debit card is used.

Key Features and Benefits of Chime

Simplicity and fee transparency are key selling points for Chime, but these are just two of the appealing features offered by this online bank. Here are a few of the other benefits that could make Chime worth exploring:

• Receive Paychecks Faster: For users who open a Chime spending account, it may be possible to get paychecks direct deposited faster than with other banks. Chime claims that some direct deposited paychecks can post to spending accounts up to two days earlier than the competition.
• No-Fee Banking: Chime has cut out annual fees and overdraft fees as well as ACH bank transfer fees, lost card fees, foreign transaction fees and monthly account service fees.
• Automatic Savings Tool: For members with spending and savings accounts, Chime offers tools to help automatically shift funds into savings. These tools include an automatic transfer from paycheck deposits and the option to round up debit card purchases to the nearest dollar with the balance shifting into savings.
• Competitive Interest Rates: Chime savings accounts offer a 0.50% APY interest rate to help users grow their money over time.
• Solid Security: Chime is a member FDIC bank, and deposits made to both spending and savings accounts are insured up to $250,000 through either Bancorp Bank or Stride Bank N.A.

The Chime App

As with most online banks, Chime’s iOS and Android app are central to the experience. The app has a simple, clean interface that allows users to easily check balances, deposit checks, set custom notifications and complete digital transactions with a smartphone. The app also helps enhance account security by allowing users to freeze all account transactions at the tap of a button.

The Chime app also has a few handy features that you may not find with competing apps. The Pay Friends feature, for example, allows members to send cash digitally without the need for other apps such as Cash or Venmo. When the time comes to grab some actual paper money, the Chime app even offers a map of all the free ATMs in the area.

What to Watch For

Chime Online Bank excels when it comes to simple, low-cost banking, but it does have a few potential drawbacks. Here are a few possible downsides to consider before opening an account with Chime:

• ATM Fees: Though Chime users have access to 38,000 no-fee ATMs, the bank charges a $2.50 per transaction at non-partner ATMs. These fees could add up quickly when coupled with the machine’s service fee.
• No Personal Checks: Chime does not offer the option to obtain traditional paper checks. To complete check transactions, users can request individual checks be sent directly from the bank. Users who have had a Chime account for at least 30 days can also send checks using the Checkbook feature on the app.
• Limited Overdraft Protection: While users won’t incur overdraft fees, Chime may only cover overdrafts up to $200. Users must also have received at least $500 in direct deposits into their spending account within the last 31 days to qualify for overdraft protection.
• Lack of Lending Power: Unlike many competing online banks, Chime does not offer users lines of credit. This accounts for Chime’s nominal overdraft coverage and means users must look elsewhere when seeking loans.
• No Joint Accounts: This could be limiting for couples or youngsters sharing an account with parents.
• Tricky Cash Deposits: Chime does not accept cash deposits, which could be complicated considering its lack of brick-and-mortar locations.
• Transfer and Withdrawal Limits: Users can transfer no more than $2,000 per day using the Pay Friends feature. Only $500 per day can be withdrawn as cash from ATMs and $2,500 can be charged to the debit card per day.

Getting the Most from Chime

Chime is committed to providing a low-cost, user-friendly banking experience for its members. This makes Chime an ideal choice for individuals who prioritize simplicity and value over lots of features. If you’re considering options for your first bank account or just need additional accounts without any bells and whistles, Chime may be a perfect fit. This bank’s feature-rich app could be an ideal option for on-the-go millennials or anyone who likes to keep their financial life simple.

If you’re searching for a bank with lending power, investment vehicles and more traditional options like checks and physical branches, you may want to keep looking. Capital One Bank, for example, provides a full range of banking services online with no fee but also offers retail locations and lending services. American Express also has online banking services that pair nicely with their flagship credit cards.

Is Chime Right for You? 

As a simple, straightforward online bank, Chime offers a mix of useful tools to help its users build financial stability. This bank’s welcoming online presence and sleek, full-featured app could make it an ideal choice for kids and young adults just starting out on their financial journey. Chime’s simple spending and savings accounts also remove the barrier of prohibitive fees, making them a useful tool for parents helping their kids learn about money.

So, if simplicity, transparency and value are top priorities when it comes to banking, it may be worth adding Chime to your list.