Over the past several years, Chime has become one of the most popular online banks on the market. Chime is a neobank, or a fintech company that offers online services. Neobanks are often referred to as challenger banks because they challenge the traditional banking market.
But in the midst of its growing popularity, Chime recently made headlines for a very different reason: closing customers’ accounts without warning.
As a result, many Chime customers may be looking to move their money to another institution. In this article, we outline some Chime alternatives, as well as steps you should take if Chime or another neobank closes your account.
What’s Wrong With Chime?
In July 2021, the nonprofit investigative newsroom ProPublica broke the news that Chime had closed many customers’ accounts without warning — and without returning its customers’ money.
Since April 2020, Chime received 920 complaints through the Consumer Financial Protection Bureau (CFPB); hundreds of those complaints indicated that accounts were closed against customers’ will. As of August 2021, there are more than 1,200 complaints overall.
In response, Chime said that accounts were closed due to security concerns and suspected fraudulent activity, but did note that some accounts were closed in error. They’ve apologized and have “made efforts to make things right with these members.”
Also concerning is that while Chime seems like a bank at face value, it actually isn’t one. According to the company’s website, it’s a financial technology company whose banking services are provided by The Bancorp Bank and Stride Bank. While the banks that actually hold Chime customers’ money are FDIC insured, the fact that Chime itself isn’t a bank could create some regulatory gaps.
Chime Disclosure – 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.
Should You Switch Banks?
Despite the complaints, Chime has millions of customers, many of whom have had a great experience with the fintech company. If you’re happy with your service, then you don’t necessarily need to switch. That being said, the recent reports may be eye-opening for some Chime customers, and you may want to consider alternatives.
Best Chime Alternatives
Varo: Best for Building Credit
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If you’re looking for a Chime replacement that offers all-around excellent service for your banking needs, then Varo might be right for you. It offers full-service checking and savings accounts, cash advances and a credit building account that’s a perfect replacement for Chime.
Key Features:
- Cash advances: Varo allows cash advances of up to $100 on your direct deposits, to be paid back within 15-30 days. These advances can help you avoid overdraft fees and stretch out your paycheck for a few more days.
- High-interest savings: Varo’s savings account offers 0.20% APY as of Aug. 26, 2021, but you can earn up to 3% when you have $1,000 or more in direct deposits, a daily savings balance of $5,000 or less, and a bank and savings account balance of more than $0.00.
- Credit builder: The Varo Believe feature allows you to start building your credit with no annual fees, no interest, and no minimum upfront deposit. It works like a secured credit card where you add money to your vault, spend up to that amount, and then pay your monthly balance on time. Varo will report the activity to the credit bureaus to help you build your credit score.
- Up to 3% APY on your savings
- Secured credit card feature to help build your credit
- No banking fees and no-fee overdraft
- Cash advances and early access to direct deposits
Cons
- There’s a limit on how much money you can earn the 3.00% APY
- Limits and fees on cash deposits
Novo: Best for Small Businesses
Novo is a business checking account specifically designed with small businesses in mind. It’s powerful in its simplicity, and it requires no monthly fees or minimum balance. It integrates easily with business software and has many critical business features.
Key Features:
- Invoicing: You can send invoices, track payments, and accept debit and credit card payments when you connect your Novo account to your Stripe account.
- Planning and budgeting: You can plan your business budget and set up different reserve buckets for taxes, profit, payroll, and more.
- Connectivity: Easily connect your Novo account to other business tools like Stripe, Shopify, Quickbooks, Zapier, and more.
- Sending money: Your Novo account allows you to send money both in the U.S. and internationally via ACH, paper check, and international wire.
- No monthly fees for account maintenance or transactions
- ATM refunds worldwide
- Business features like invoicing and bill pay
- Connect with other business software
Cons
- No savings account or interest earnings
- You can’t send wire transfers
- No recurring payments with bill pay feature
Current: Best for Teens
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Current doesn’t claim to be a bank. In fact, it specifically states on its homepage that it isn’t one. But Current provides an online spending account that makes it easy to receive direct deposit and spend money from your account.
Key Features:
- Direct deposit: Current allows you to set up direct deposit on your premium account and get your money up to two days early.
- Overdraft protection: Current allows you to overdraft your account up to $100 without paying a fee. To qualify, you have to receive a qualifying direct deposit in your premium account.
- Cashback spending: When you spend money with your Current card, you’ll get cashback points up to 15x back for certain purchases. You can redeem your points in the Current shop or for cash back to your account.
- Teen banking: Current allows you to set up an account for your teen with total parental control, while still allowing your child to spend and save. You can deposit money into your child’s account, set limits on their spending, block spending at certain merchants, and even set chores that your child has to complete to access their money.
- Get your money two days early with direct deposit
- Overdraft protection up to $100
- Up to 15x cashback on your spending
Cons
- Some features only available with a premium account at $4.99 per month
- No weekend phone customer service
- No interest earnings on the money you save
Lili: Best for Freelancers
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Lili is specifically designed as a banking solution for freelancers. It’s an all-in-one hub where freelancers can meet all of their financial needs, including banking, taxes, invoicing, savings and more. Lili doesn’t have minimum balances or charge hidden fees.
Key Features:
- Expense management: Lili allows you to track your expenses in real-time and easily categorize them from the mobile app.
- Tax bucket: Your Lili account includes a tax bucket, which automatically sets aside a certain percentage of your income to use for your estimated tax payments.
- Cashback rewards: Your Lili debit card includes cashback rewards when you shop at participating merchants, whether it’s business or personal spending.
- 1% APY savings: Lili currently offers 1% APY on your savings account, which is higher than most high-yield savings accounts currently offer.
- Invoicing: Create, edit, send, and organize unlimited invoices in the Lili app to help you get paid for your freelance business.
- No hidden fees or minimum balance requirements
- 38,000 fee-free ATM locations
- Many tools to help manage your freelance business
- Receive your direct deposits up to two days early
Cons
- $4.99 per month fee to use Lili Pro and get access to more advanced account features
- 1% APY on savings is only available for Lili Pro users
- Limits on mobile check deposits
- You can only manage your account on the app, not on desktop
One Finance: Best Hybrid Spend/Save Account
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One Finance is a fintech and banking company designed to make financial services more accessible and authentic. The account has all of the features you’d expect of a normal bank, including the ability to spend, save, borrow, and share money, all from a hybrid spend/save account with no fees and no minimum balances.
Key Features:
- Pockets: Instead of using separate accounts, your One Finance account has pockets that allow you to separate your spending and saving, and plan a budget. When you spend money, you can indicate which pocket to pull the money from. You can also share pockets with friends and family for joint expenses or goals.
- Credit line: You aren’t limited to spending what you have in your One account; your debit card actually acts as a credit line. If you spend more than you have in your account, it simply pulls from your credit line and you’ll pay interest on the purchases.
- Savings interest: You’ll earn 1% APY on up to $5,000 in your save pocket and 3% APY on round-ups from your One debit card.
- High APY savings account ranging from 1-3%
- 55,000 fee-free ATMs
- Credit score monitoring
- Receive your direct deposits up to two days early
Cons
- No separate accounts for checking and saving
- No weekend customer support
- Limit on how much money you can earn interest on
Alliant: Best Credit Union
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Alliant Credit Union combines the benefits of an online bank with a credit union to create a unique banking experience. Unlike many credit unions, anyone can join Alliant for your checking, savings, borrowing, and investing needs.
Key Features:
- High-yield checking and savings: Alliant allows you to earn 0.55% on your high-yield savings account. Unlike many other accounts, you can even earn interest on your checking account at a rate of 0.25%.
- Borrowing: Alliant offers plenty of options for you to borrow money, including mortgages, auto loans, personal loans, a credit card and more. These borrowing options create a more full-service banking experience.
- Investing: You can invest for retirement using an IRA, Roth IRA, SEP IRA, or trust account.
- Insurance: Protect your assets with Alliant by purchasing auto insurance, homeowners insurance and several types of life insurance.
- No eligibility requirements, unlike many credit unions
- Many accounts to choose from so you can meet all of your banking needs in one place
- Earn interest on both checking and savings account
Cons
- High fees on account overdrafts
- Many accounts to choose from makes it less simple than others on this list
Axos: Best for a Variety of Accounts
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Axos is an online bank that has services to meet both your personal and business financial needs. It offers a variety of accounts for spending, saving, investing and borrowing. Axos stands out from other banks on this list due to its rewards checking account.
Key Features:
- Rewards checking: Unlike many of the options on this list, Axos offers a rewards checking account. Depending on the account you choose, you can get either 1.25% APY or 1% cashback on your purchases.
- High-interest savings: The Axos basic savings account allows you to earn up to 0.61% APY on your savings. You can also save through CDs, money market accounts, and IRAs.
- Investing: Axos allows you to start investing through either a managed portfolio or commission-free self-directed trading.
- Small business banking: In addition to using Axos for your personal needs, you can also use it for your business. They have a basic fee-free checking account, a business interest checking account with 0.81% APY, and business savings.
- Borrowing: Axos can meet some of your borrowing needs by offering mortgages, personal loans, and commercial lending.
- Earn interest or cashback on your checking account spending
- Business checking, savings and lending available
- Many accounts to choose from to meet your financial needs
Cons
- The number of account options makes Axos less simple than others on this list
- Minimum deposit of $250 to open a savings account
LendingClub: Best Budgeting Tool
LendingClub Bank recently purchased the popular online bank Radius Bank, where it offers rewards checking, interest on your savings, fee-free accounts and other banking features.
Key Features:
- Cashback checking: You can earn 1% cashback on your spending on unlimited purchases. The account also has ATM rebates, 0.10% APY on your balance, and no monthly or hidden fees
- High-yield savings: With LendingClub’s savings account, you can earn 0.15% on balances from $2,500 to $24,999.99, and 0.25% on balances above $25,000.
- Business checking: LendingClub offers a business checking account where you can earn cashback on your purchases, earn interest on your balance, and sync your account to your accounting software.
- Financial dashboard: LendingClub has an entire financial dashboard where you can link external accounts, make a budget, track your spending, and track your debt and net worth.
- Budgeting tool to help you manage your spending
- Earn cashback on your personal and business spending
Cons
- Minimum balance required to earn interest in the savings account
- Personal loans, but limited other lending options
Ponce Bank: Best for Money Market and CD Options
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Ponce Bank offers online banking with a variety of features, including its personal banking, business banking, lending solutions and more.
Key Features:
- Interest-bearing checking: Ponce offers interest in your checking account, with the rate you earn depending on your account balance. Other checking options don’t have a minimum balance requirement or fees.
- High-interest savings: Ponce offers a variety of high-interest savings options, including a savings account, passbook savings, money market account and CDs.
- Investing: You can save for yourself or your child using Ponce’s individual retirement accounts and custodial accounts.
- Business solutions: Ponce offers a variety of business solutions, including checking and savings accounts.
- Plenty of savings options to choose from
- Earn interest on your checking account
- Business checking and savings to meet more of your banking needs
Cons
- Monthly fee if your interest checking account balance falls below $1,500
- Ponce makes it difficult to find its checking and savings account rates
- Savings rates are lower than many competitors
Ally: Best for Saving for Financial Goals
Ally Bank first became famous for its high-interest savings accounts, but has significantly expanded its service offerings. Unlike some of the accounts on our list, you could use Ally as your full-service bank instead of one type of account.
Key Features:
- High-interest saving: Ally is well-known for its online savings account. Not only will you get a competitive APY of 0.50%, but you’ll also get buckets to help you organize your money into certain categories for different financial goals. Other savings options include money market accounts and CDs.
- Interest checking: Ally offers 0.10% APY on checking accounts with less than $15,000 and 0.25% APY on checking accounts with more than $15,000.
- Investing: Ally offers a variety of investment options in both managed portfolios and self-directed accounts. You can invest in stocks, exchange-traded funds (ETFs), bonds, mutual funds and more.
- Borrowing: Ally has a variety of loan options, including mortgages, auto loans, and personal loans.
- Savings bucket feature makes it easy to save for multiple goals at once
- Many financial services offered, including checking, saving, investing, and borrowing
- Above-average savings APY with no minimum balance to earn interest
Cons
- No option to deposit cash
What to Do if a Neobank Closes Your Account
If you bank with Chime or another neobank and they close your account, don’t panic. There’s still a chance of recovering the money you’ve lost.
If you try to log into Chime and find that you can’t access your account, contact Chime’s customer support immediately. You can email them at support@chime.com, call 844-244-6363, or request assistance through the company’s mobile app.
It’s important that you reach out as soon as you notice a problem. The sooner you reach out, the sooner they can help straighten things out and access your money.
To gain access to your account, Chime may require you to provide documentation to prove your identity, including a picture of your photo ID or a utility bill to prove your home address.
Finally, if the company isn’t responsive to your communications, you can publicly mention the company on social media or file a complaint with the CFPB. The public attention may inspire the company to act more quickly.
