When you’re looking to save money, you consider the services that offer the most bang for your buck. You might have to compare services or ask questions; it’s common for people to ask others about the financial products they use and what makes those products so great. In this Chime vs Bank of America comparison article, we’ll discuss the pros and cons of each bank and help you decide which is best for you.
Bank of America
Bank of America traces its beginnings to the earliest days of the republic. Bank of America is the first coast-to-coast bank in the U.S., merging with NationsBank in 1998. It is now a global financial services company that serves one out of every two households in America.
Bank of America, the second-largest bank in the United States by assets, offers in-person banking through roughly 4,300 financial centers. It also maintains a robust digital presence through its mobile app and online banking platform. Bank of America offers business and commercial banking products and services along with personal banking products.
It has a large presence in the United States with 4,300 financial centers and 16,800 ATMs Low rates of interest on savings accounts and CDs
High user ratings for a mobile app High overdraft fees
Monthly fees can be waived
Chime, launched in 2013, is a financial technology company offering banking services through partner financial institutions. You can open a Chime Spending Account, Credit Builder Account, or even a Chime Savings Account. The company also offers the Chime card to make spending and withdrawals just as easy as with a regular bank account.
Although Chime is not a bank, it does offer FDIC insurance on all its accounts. This means that your money is just as safe with Chime as with an online bank or any traditional bank.
According to its statement of purpose, Chime’s motivation is to furnish its customers with more monetary control. Some traditional banks are known to benefit individuals with high overdraw charges and other secret costs, but Chime has no fees.
Free accounts with simple lineup The company offers online support only, not face-to-face service.
Competitive Savings APY Some services are not fee-free - you may pay for depositing cash or for ATM withdrawals.
Savings tools are available to help improve your savings habits. Some services have limits, such as spending limits on withdrawals and purchases.
Early receipt of direct deposit payments has a positive impact on one's ability to plan, budget, and save. There are no multi-currency account options available. Fees for using your card overseas may be higher than in the United States.
Pros and Cons of Chime vs Bank of America
So, let us explore, “Which is Better, Chime vs Bank of America?” The answer to this question and others depends on you. What do you want from your banking service or financial institution?
Bank of America is your best choice if you are looking for simple, everyday banking with direct deposit and overdraft protection. However, you will not like the fees associated with a checking account. If you overdraft your check, you are subject to an overdraft fee.
A checking account with Chime is different. With Chime, you are never charged an overdraft fee. Chime has several options that will help you eliminate overdraft fees. First, you have the SpotMe feature.
Chime will spot you in increments of five dollars, which you can send to people on your contact list who are also Chime customers. So, for example, if Chime spots you for $40, you have (eight) five dollar boosts you can send to eight people.
These eight people can each send five dollars back to you. The secret is that if you go to the store and you are short any amount, up to $40, your spot me will pay the remainder of what you owe.
When you get another direct deposit, Chime will take out what you owe and deposit the rest of the money into your checking account.
Chime has another excellent service, if you have direct deposit. You can overdraft your account by up to $200. Like the SpotMe feature, the $200 overdraft charge is taken from your next direct deposit.
What makes this feature so special is that this feature works like a revolving line of credit for as long as you have a direct deposit, set up with Chime.
I personally have Chime, and I love it. I take advantage of all the benefits Chime has to offer. I love getting paid up to two or more days early. Early payments help to keep my bills from becoming overdue so that I can pay them early.
With Chime, you can also qualify for a savings account, and a credit-builder account, both of which I have.
You can have a portion or a percentage of your paycheck deposited in your savings or credit-builder account.
According to how you are paid, you can also have money deposited in only one of the accounts. However, you do not have to wait until you get paid to deposit money into your account.
Bank of America offers checking and savings accounts as well. However, they work differently than Chime. Aside from the $35 overdraft fee you have to pay for each returned check, you may be charged a maintenance fee.
However, in January of 2022, Bank of America reduced its overdraft fee to $10. Every checking account at Bank of America is charged a maintenance fee of $4.95-$25 unless you have monthly deposits totaling $100 or more, in which case the maintenance fee is waived.
Bank of America also eliminates its Balance Connect fee, which customers are charged when they transfer funds from their savings to their checking account.
Chime has never charged a transfer fee to move money from one account to another. Therefore, you can transfer money between accounts as many times as possible without paying the penalty.
Benefits of Chime at a Glance
Chime benefits are great for people who want more than an average bank account. Although Chime is strictly online, the services they provide are exceptional for most people. Not everyone enjoys the hassle of person-to-person banking. The lines are too long, the gas is too high, and banks are too crowded. These are enough reasons to stay home and do banking online. Let us recap the pros of Chime:
- Get paid up to two days early
- No overdraft fees
- Open a credit-builder account
- No transfer fees
- No transaction fees
- No monthly maintenance fees
- Up to $200 in overdraft credit
- Can set up an automatic deposit in savings or credit-builder account
With Chime, the sign up process is simple. You can open an account online in less than 10 minutes. But, first, you need to choose which type of account you want.
Next, you need to determine how you will fund your account, whether it be through a payroll deposit or a government deposit. If you do open a savings account, you will receive a debit card in a few weeks.
Chime does require you to verify your name, address, and social security number, just like any other bank. The big difference is that you do not have to spend hours waiting for someone to call your name and set up your account. It can take hours if you walk into a bank. If several people are ahead of you, you will have to wait your turn.
With Chime, there are no lines, no red tape, and no long-drawn out paperwork to complete. When you submit your information online, you are done. No one will call you and hassle you about your account.
You have access to your account, 24 hours per day, seven days per week. Unlike traditional banks that require you to open your account with a set deposit amount, Chime is not that way.
Chime lets you open your account for $1 or nothing at all. This is one of the advantages that Chime offers; brick and mortar banks do not. Being able to lock and unlock your card allows you to block transactions.
If you lose your card, your funds are protected, and you can order another card at no charge. If you need to send money to someone, just pull the name from your contact list, type in how much you want to send, and click pay. It is just that simple.
If you want to save more money in your savings, you can have extra change added to your savings account. Did you know that your savings earn interest? When you open a savings account at Chime, your account will earn 0.50 percent interest.
Whenever you make a purchase, you have the option of transferring your spare change to help increase your savings. In addition, chime allows you to open a credit-builder account if you want to build your credit.
You can move money from your savings or checking account, to your credit-builder account. There is no maximum or minimum amount you need to have in your account. The credit builder card is not a debit card, it is an actual credit card that you can use anywhere that accepts Visa. With a Visa card, you can rent a car, or a hotel, which both require access to a real credit card, not a debit card.
Benefits of Bank of America
Bank of America has been around for a long time, and its services are just now changing for the better. The most expensive part of banking with any bank, including Bank of America, is fees. Customers were paying $35 for overdraft fees, $12 for transfer fees, and $25 per month for maintenance fees.
Recently, Bank of America has changed how it interacts with its customers. The bank started revamping its services by reducing and eliminating some of its fees. However, customers can invest in their savings by selecting the save the change program offered by Bank of America.
When you make a purchase, the leftover change is deposited into your savings. If you want to build your credit, you may qualify for a secured credit card. You have to add money to an account that will equal your credit amount.
For example, if you deposit $1000 into an account, then your credit limit is $1,000. This is an excellent way to build credit or improve your credit score. Your payments are reported to the three major credit bureaus.
Bank of America has a feature that Chime doesn’t. Balance Assist allows customers to borrow money over a short period, up to $500, but in increments of $100. Payments are made in three monthly payments over a 90-day period. The charge for this service is $5.
Most customers fall into hardship when they constantly overdraft their accounts. Bank of America is eliminating this feature. Customers will no longer be able to overdraw their accounts from the ATM.
This may not be feasible for some customers, as an emergency can arise at any time, and customers will not be able to get their hands on cash fast. This can be good for some customers and a drawback for others.
However, to help customers combat their debt, and stay out of the negative, Bank of America is offering a finance class. Customers can learn how to handle their money responsibly, how to save efficiently, and how to use their resources wisely.
Customers are taught how to invest, borrow, and budget their funds. Unfortunately, with bills piling up, credit card debt, high food prices, and everyday expenses, this is not easy.
Customers that want to learn about the concept of money can visit Bank of America’s homepage for more information. As for which financial service is better, you need to decide. If you need more than what Chime has to offer, you need to look at what Bank of America is offering.
If Chime is more your speed, you can open an online account in less time than it takes you to open an account in person. Both financial services have a lot to offer.
If you choose one that is not suitable for you, you can always change your mind. You are in total control of your financial needs. Another important note to take into account is business accounts.
Chime does not offer business accounts. However, if you receive a business check and have a business in your name, you can deposit your check through your mobile app. On the other hand, Bank of America does offer business checking and savings accounts.
Customers that need to refinance their homes or lower their mortgage can reach out to a customer representative at the bank. The Community Ownership Commitment Program helps customers to become homeowners. Over the next few years, Bank of America is looking to help more than 60 million people afford a home.
Bank of America is for you if any of these benefits are what you are looking for. You get more than most traditional banks offer when you choose to bank at Bank of America.