Chime vs Simple: Which Fintech Disruptor is Better?

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Updated on Tuesday, July 16, 2019

Chime and Simple are online-only, mobile banking apps that aim to disrupt the way traditional bank accounts work. Both apps offer tightly integrated budgeting features that make managing your money easier and more automated, and give you access to thousands of fee-free ATMs through partner networks.

Chime offers a checking account and an optional savings account, although the prior yields no interest and the latter’s APY is negligible.  Chime’s big claim to being a fintech disruptor is its ability to credit your account with your paycheck two days ahead of schedule. Chime partners with The Bancorp Bank to offer FDIC-insured bank accounts and issue a Visa® debit card.

Simple’s cash management account is a hybrid checking/savings vehicle that yields a competitive APY. Simple’s accounts are managed in partnership with BBVA, which issues the Simple Visa® debit card and provides FDIC insurance on your money.

Chime vs Simple: How their rates compare

 ChimeSimpleNational averageOnline bank average
Savings1.00% APY0% APY for balances above $2,0000.27% APY1.69% APY
Checkingn/a0.60% APY0.19% APY0.52% APY

Chime focuses on saving the money you already have, rather than growing your balances at a competitive rate. Chime Spending Account, its checking account product, earns zero interest, while its optional Savings Account earns at only a minimal rate.

Simple’s hybrid account offers a competitive yield for savings, but you must meet a minimum balance requirement to earn the full rate. To earn 0.60% APY, you must shift at least $2,000 from the checking side of the account to the “protected goals” savings side. If your balance drops below $2,000, you’ll earn 0% APY instead. The checking account earns a 0.60% APY, regardless of balance.

Chime vs Simple: Which has better account options?

With direct deposits, Chime eliminates the typical one- to two-day “electronic limbo” of waiting for paychecks to move via Automated Clearing House (ACH) from your employer’s bank to your account. Instead, Chime makes your paycheck instantly accessible in its Spending Account when your employer deposits it. This can be a great option for those who live paycheck to paycheck and need more immediate access to that money.

Chime’s Spending Account helps automate the savings process. Its Save When You Spend feature automatically rounds up your debit card transactions to the nearest dollar and transfers the extra balance to your Chime Savings Account. You can also choose to automatically set aside 10% of each paycheck towards savings.

Simple offers budgeting tools as well. You can allocate money kept in checking side of the account among expenses, savings and discretionary spending sub-accounts. The protected goals savings component includes multiple sub-accounts, called “savings goals,” letting you earmark funds for an emergency fund, college tuition or your next big vacation. For each goal, you set a total amount to save, a date to save it by and how often you want to transfer money from your Simple checking account. The app then automatically tops up the savings goals over time.

Simple also offers shared accounts for two users — Chime does not currently offer joint accounts. Shared accounts lets you and your partner manage money and save together using the tools outlined above. According to Simple, you can open a shared account with anyone, from your roommate to the person you just met at a hostel.

Chime vs Simple: How they compare on fees

 ChimeSimple
Account monthly fee$0$0
ATM fees$2.50 (out-of-network ATM fee/Over The Counter fee)$0
Overdraft fees$0$0

Simple is serious about charging zero fees. There are no monthly fees, no overdraft fees, and no foreign ATM fees. However, it’s still wise to stick to Allpoint ATMs when you can — Simple may not charge a fee, but the ATM owner still does, and Simple doesn’t reimburse ATM surcharges. You also pay Visa’s International Service Assessment (ISA) of 1% of the transaction amount if you use your Simple card internationally. As for overdrafts, your transaction will simply be declined if you try to make a purchase without sufficient funds.

Chime is only slightly less fee-free than Simple. It doesn’t charge fees for overdrafts, transactions, card replacements and more. However, if you use an ATM outside of the MoneyPass or Visa Plus Alliance networks or make an over-the-counter withdrawal, you’ll be charged a $2.50 fee. As with Simple, any overdraft transactions will be declined.

Without charging fees, these companies have to make money somehow, right? Both Chime and Simple make theirs by taking a percentage of the interchange fees from your debit card transactions at merchants (they divide the fees with the card issuer). Simple also makes money through the interest margin on deposits.

Who should bank with Chime?

Chime is useful if you find yourself needing access to your paychecks sooner than usual. Its early direct deposit model takes your money out of a bank holding pattern and puts it in your hands as soon as it’s deposited by your employer.

Chime is also a great option for customers who might have bad credit or a compromised banking history. Unlike many traditional banks, Chime doesn’t use ChexSystems, a consumer reporting agency that keeps track of any problems in your banking history. Instead, Chime opens the doors for customers with bad credit to help them get back on their feet through their essentially no-fee account model and automatic savings options.

Who should bank with Simple?

You should bank with Simple if you’re looking for a completely fee-free banking experience and the savings benefits of a high savings account rate. There are no fees, even for out-of-network ATM usage. And if you’re able to keep at least $2,000 stashed away toward savings goals, you’ll snag a competitive APY and grow your savings faster.

Alternatives

One alternative to Chime and Simple is Aspiration. Aspiration sets itself apart by offering “socially-conscious and sustainable” banking and investment products, and donates 10% of its customer-paid profits to American charities. It also operates on a Pay What Is Fair system, where its customers get to choose what to pay in monthly fees, even if it’s $0. You can use any ATM in the world without incurring a fee from Aspiration, which will also reimburse you for any ATM surcharges you rack up.

Its banking product is a cash management account called Aspiration Spend & Save. It earns 0.00% APY on the entire Save account. Even better, the Spend account earns 1% cash back on purchases at socially responsible businesses and 0.50% cash back at not-so-conscious businesses.

Another alternative is Empower, which operates strictly on its mobile app. Empower charges zero fees and provides an AI assistant to help you combine accounts, track spending and find savings. It earns some solid rewards, too, although its website language is slightly misleading in places. By default, using the Empower debit card earns 1% cash back on the first $1,000 you spend each month, and additionally, you’ll earn 2.15% APY on your savings account balance. However, you can snag a 30-day boost, increasing your cash back to 2% and earning you an additional 2.15% APY for every person you successfully refer to Empower.

Empower forgoes all fees, including ATM usage, service fees, overdrafts and more. Empower will also reimburse you for one out-of-network ATM fee per month. Otherwise, you can physically access your cash through MoneyPass ATMs.