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Updated on Thursday, April 25, 2019
The battle for America’s banking customers rages across multiple fronts, but none may be as contested as your cellphone. T-Mobile, one of the nation’s largest wireless carriers, is entering the mobile banking arena with T-Mobile MONEY, a fee-free, online high-yield checking account offering an annual percentage yield (APY) of 4.00%.
“As the [smartphone] becomes more the epicenter of our life, what we realized is that people aren’t just banking online, but from the device,” said Tiffany Minor, T-Mobile’s marketing director of financial services. “Those are our customers and that’s their mobile lifestyle.”
But can a mobile network really compete with traditional banks and fintech startups when it comes to mobile banking?
T-Mobile MONEY high-yield checking
The most eye-catching part of the T-Mobile MONEY account is the high interest rate it offers users. The current 4.00% APY puts it right up there with some of the highest-earning checking accounts available.
However, this sky-high APY only applies on balances of up to $3,000 — the remainder of your money will earn an APY of 1.00%. Also, like with almost every high-yield checking account, the customer has to meet certain requirements to enjoy the highest APY. To get the 4.00% yield, users must:
- Be enrolled in a qualifying T-Mobile postpaid wireless plan: Whether or not you are a T-Mobile customer should determine how much you care about this offer. If you’re not presently a T-Mobile customer, you can still open a T-Mobile MONEY account, but you’ll only earn 1.00% APY on your entire balance.
- Make $200 worth of deposits into the account each calendar month: It’s worth noting that any “promotional deposits” T-Mobile might place on your account as a reward for certain activities (which have yet to be determined by the company) wouldn’t count toward meeting these requirements.
- Register through the T-Mobile MONEY website or app with your T-Mobile ID: The T-Mobile ID is basically another online account that serves as your “home” for all of your non-banking T-Mobile activities online, such as paying your bill, checking to see if you can (or want) to upgrade your plan, etc.
If you meet the criteria above, you get 4.00% APY on balances up to $3,000 as a reward. Another perk T-Mobile grants to customers who fulfill the requirements for the high interest rate is enrollment in an overdraft protection program called “Got Your Back.” Members in this program receive a $50 credit each month that’s used to cover transactions that would put your balance in the negative. Customers then have 30 days to deposit enough money in the account to cover the debt.
There’s no fee associated with this service, or any kind of daily charge for the amount of time you remain in overdraft. However, if you fail to pay after your 30 days are up, T-Mobile promptly boots you out of the Got Your Back program.
“Much like when you lend money to your brother or sister or friend, if they don’t pay you back you’re probably going to say ‘No, I’m not going to do that anymore,’” said Minor. “Same with us.”
There’s no mention in the terms of service of any additional overdraft charge, but there is a line explaining a failure to pay an overdraft may cause T-Mobile to “report this information to outside credit reporting agencies or databases.”
Is T-Mobile a bank now?
To be clear, T-Mobile hasn’t transformed itself into a bank with the unveiling of its MONEY account, but is working with BankMobile, itself the online division of Pennsylvania-based Customers Bank, to provide the banking services.
Our sister site DepositAccounts.com, also owned by LendingTree, gives Customers Bank an “A” health rating and the institution has been in business since 1997, so rest assured that T-Mobile hasn’t partnered with some fly-by-night operation.
How do you use T-Mobile MONEY?
T-Mobile MONEY lives as an app on your smartphone. “There’s not a lot of [mobile banking] options that actually allow you to sign up and open a bank account on a device,” Minor said. “That was important to us as a wireless company.”
Customers can use the app to manage all aspects of their bank account: check balances, set up a direct deposit, link the account to a mobile wallet and other features common to mobile banking, said Minor.
You also can access the funds in T-Mobile MONEY via a physical Mastercard debit card that’s mailed to you after enrolling. Note that you receive a digital version of this card as soon as you sign up and your account opens, which you keep in a wallet app on your phone.
This debit card can be used at 55,000 Allpoint ATMs around the nation without any fees. T-Mobile MONEY also won’t charge any fees if you use an ATM outside the network, but it currently doesn’t reimburse you for third-party fees you may incur.
The bottom line on T-Mobile MONEY
T-Mobile’s nationwide offering presents a solid choice for current T-Mobile customers with a qualifying plan. If you’re thinking of switching carriers, the lure of a high-yield checking account may be enough to push you to side with T-Mobile. However, nobody should start shredding their contracts with their current carriers based on this single product offering.
For one thing, there’s no way of knowing how long the high 4.00% APY will last. When asked by MagnifyMoney if this was just a limited-time promotion, Minor emphasized “We didn’t design [T-Mobile MONEY] as a promotion,” and that the partnership between T-Mobile and BankMobile was structured in a way to make the high interest rate sustainable.
Still, best intentions don’t come with iron-clad guarantees, and banks change interest rates on products all the time. As they would with any other account, customers should prepare for the terms to shift and not fall in love with a specific rate. But if you’re looking to dip your toes into mobile banking and already qualify for the perks associated with T-Mobile MONEY, you could do far worse.