Chime Bank and Ally Bank are both high-quality online banks that offer essential services free of charge. However, when weighing the two options, it’s important to consider which choice is best for you. So today, we will take a closer look at Ally Bank vs Chime Bank.
Chime is quickly becoming the financial institution for millennials. It is simple to use as they offer a checking account, savings, and a mobile app to manage these two accounts. In addition, there are no overdraft fees, no monthly minimum fees, and you have access to over 60,000 fee-free ATMs nationwide.
Although they do not offer a physical branch, Ally Bank is a better bank for those looking for an online banking experience with features such as lending and investment options.
Who is Chime Bank and Ally Bank?
Chime is not owned by a bank or financial institution. It is a fintech company, and it is FDIC insured. Thus, we will refer to Chime as Chime.
Ally Financial Inc is an online banking company, and its direct banking subsidiary is Ally Bank. They originated as a GMAC auto lender. However, it is now a national banking institution.
Pros and Cons for Ally Bank and Chime Bank
|ALLY BANK||CHIME BANK|
|PROS||Interest-bearing checking accounts||Unique tools for saving and managing your money|
|Savings tools that are simple to use||No fees are charged for overdrafts|
|You can open a savings account without having a checking account.||No fees for international transactions|
|A worldwide network of ATMs with no out-of-network fees||Sign-up bonuses may be available to new customers.|
|Excellent customer service|
|CONS||Overdraft fees||Limited range of products|
|Foreign transaction fees||Checking account does not bear interest|
|Customer service can be enhanced|
Who has the Best Rates – Chime Bank or Ally Bank?
Chime wins this category! Chime offers a 1% yield on balances with a paired savings account. Ally Bank offers just between a 0.1% and 0.25% yield on balances.
What are the Saving Account Features of Ally Bank vs Chime Bank?
We all want to save money, but it is often challenging in reality. Both Chime and Ally Bank have automatic saving features that allow you to set it and forget it. Let us explore the two.
Chime’s savings features are Purchase Roundups. It is linked to your Chime debit card or Chime Credit Builder Visa Credit card, so when you make a purchase, it rounds that transaction up to the nearest dollar.
The remaining balance is transferred automatically to the Checking or Savings account. This is completed by the next business day. Note that you must turn on this feature. It will be automatic if you have both the Debit and Credit Builder accounts.
Chime also has an automatic saving setup. You designate a percentage of your paycheck every time you get paid to deposit into this account to set this up. You do need to have a checking account to take part in this.
Ally Bank has a different feature; recurring transfers. You can auto-transfer your money from your checking account into your savings account using this.
What is remarkable about their savings feature is that you can set up buckets to help organize your savings! This is a great way to visualize each savings goal you set. You can create up to 10 buckets without having multiple savings accounts.
Ally Bank also has something similar to Chime’s Purchase Roundups. They will round your transactions up to the nearest dollar as well. You must accrue at least $5, and then it will transfer the savings over into your savings account.
Ally Bank offers an interest-bearing checking account while Chime does not. Of course, it is not much, up to 0.25%, but every penny of free money helps, right?
Lastly, Ally Bank is an actual financial institution offering savings CDs. These require no minimum deposit, and the longer your term, the higher your rate will be. The APY ranges from 0.60% to 2.00%.
Comparison of Ally Bank vs Chime Bank Fees
Fees are always an important factor in deciding which bank is better for you. However, in this instance, they both win here by comparing Ally vs Chime fees. They both offer a no-fee checking account.
So, you do not need to worry about either the minimum monthly account balance to keep or going over a maximum number of monthly withdrawals. However, they also have other fees that could incur, such as wire transfers or ATM fees.
Ally Bank vs Chime Bank Bonus Offers
Chime wins in the bonus offer category. Chime has a $100 referral program. If you sign up through a member’s referral link, you are eligible for the sign-up bonus. Any current member that refers someone to Chime will earn a $100 referral bonus.
So, what is the fine print? New members must receive a direct payroll deposit of $200 or more within the first 45 days of opening the Chime Checking Account. It is worth noting that Chime’s promotional incentives do change, though.
Ally Bank does not offer a sign-on bonus. However, they do offer a brokerage sign-up bonus. For the most part, you may not take part in that as there is a minimum qualifying deposit of $10,000 to receive their $100 cash bonus.
They will credit you $75 to cover any transfer fees if you switch from your current broker. This is a one-time transfer of at least $2,500, though.
Advantages of Chime Bank Over Ally Bank
Chime’s most significant advantage is how streamlined they are. Having fewer product options makes it so simple. For example, there is only one checking account feature, one saving account feature, and one credit card option (there is a debit card linked to the checking account).
Chime is also the financial institution to assist with credit repair or building one’s credit. Having a negative score can seriously affect your ability to get a bank account. Most banks perform a bank credit check to apply and are approved for their account.
They typically use ChexSystems to check an applicant’s checking and savings account history. They are looking to see if there is a history of bounced checks or outstanding fees. Chime, however, does not perform this check. So you’re free and clear to open an account as long as you meet the minimum requirements.
Advantages of Ally Bank Over Chime Bank
On the other hand, Ally has more features than Chime since they are an actual bank. They also have CDs, investment retirement products, and various loan options available to their customers outside of the checking and savings.
Ally Bank also focuses on tools with their self-directed trading feature to help consumers understand their options to make informed investing decisions. This includes research and market data. There is no account minimum to get started with their trading platform either.
Ally Bank is also more advantageous as they offer specific loans for home renovations or medical bills ranging from $3,500 up to $40,000. They also have home purchase or refinance mortgage options.
Credit Card Features of Ally Bank vs Chime Bank
Compared to a traditional bank, there is no APR nor minimum security deposit required to get a secured credit card with Chime. This enables you to deposit your checks into your checking account, use the secured account reported to the major credit bureaus, and pay all your bills on time.
Ally Bank used to have a credit card, but the card issuer, T.D. Bank, converted all Ally Bank credit cards to T.D. Bank credit cards.
So Which Bank Is Better for You?
Chime is definitely the better financial institution if you are looking for a simple way to do banking or if you need a fresh start. Chime allows you to open an account without any hassles of a credit check and has the bare minimum needed to do your banking needs. This provides less confusion and less decision-making between products.
Ally Bank is for those who want a step beyond basic banking. You will have options such as checking, savings, investment products, and loan products.