Simple Bank Review: An Online-Only Bank With Built-in Savings and Budgeting

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The banking industry has moved online in recent years, and some institutions are killing it, while some are just keeping up with outdated, ill-functioning websites.

Financial technology companies have stepped in to address the issues with the dinosaurs in the industry and offer online-only banking products through feature-rich apps.

Simple is one such company that offers fee-free bank accounts with built-in budgeting and saving features.

Here’s the nitty gritty on what we love (and don’t love) about Simple.

In this review, we’ll cover:

What Is Simple?

Simple is a financial technology company that offers an online bank account that makes saving, budgeting and spending money, you know, simple.

Unlike other online banking companies or traditional branch banks, Simple focuses on the account only — no loans, credit cards, mortgages or investing available.

Pros

Here’s what we like about the Simple bank account:

  • No monthly maintenance fee or balance minimum.
  • No overdraft fees.
  • More than 40,000 in-network ATMs.
  • High-yield savings option, offering up to 1.2% annual percentage yield.
  • Integrated saving and budgeting tools.
  • Option for a joint account.

Cons

Here’s what we don’t love about Simple:

  • Low interest on checking.
  • No direct way to deposit cash.
  • No bank branches.
  • No small business banking products.
  • No loans, credit cards or investment products.

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Simple Banking: Our Review

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Simple offers several features and a few bank account options, but they all start with signing up for a single Simple account.

With that, you can access an individual or joint checking account with budgeting features, and an individual or joint high-yield saving account.

Checking: Simple Safe-to-Spend, Goals and Expenses

Grade: B

The Simple checking account is designed to help you budget automatically, right inside your bank account.

All of your spending money lives in this one checking account (with a single account number), but you can organize it into customizable buckets:

  • Expenses: Set up buckets with weekly, biweekly, monthly, quarterly and annual fixed expenses (like bills and taxes), and Simple can automatically set aside money each time you’re paid and pull money from the correct expense bucket when you pay bills from the account.
  • Goals: Designate short-term savings goals, like a home down payment, vacation or holiday shopping, and set up a funding schedule to let your savings grow each time you’re paid.
  • Safe-to-Spend: This is the balance of your checking account that’s not set aside in Expenses or Goals, and the main balance you’ll see when you check your account online or through the Simple app. It’s the amount left over for discretionary spending while you build your savings and prepare for expenses.

The design takes a note from the classic envelope budgeting method.

You can open an account with no minimum deposit and pay no monthly maintenance fees, and the company does away with a lot of other traditional bank fees, as well.

The checking account bears only minimal interest (0.01% APY).

Aside from the budgeting buckets, Simple’s checking account works like most checking accounts. You get:

  • Visa debit card: Use your Simple card for point-of-sale transactions or to ATM withdrawals.
  • Digital payments: Link your account to PayPal, Venmo or Square Cash to send and receive payments.
  • Direct deposit: Give your employer your routing and account numbers to set up automatic direct ACH paycheck deposits.
  • Mobile check deposit: Snap a photo of a paycheck or personal check to deposit it with the Simple smartphone app.
  • ACH transfers: Link another Simple account or third-party bank account to move money between accounts.

Simple doesn’t offer direct bill pay services, but you can use your checking account routing and account numbers to set up automatic payments with service providers.

Simple doesn’t operate any brick-and-mortar bank branches or its own ATMs, so you have no way to deposit cash directly into the account. That makes it a poor option as a primary checking account for anyone who’s frequently paid in cash.

Savings: Protected Goals & CDs

Grade: A

Simple offers two ways to save: a high-yield account and no-penalty certificates of deposit (CDs).

Protected Goals

In addition to the short-term Goals in your spending account, Simple lets you create up to two Protected Goals that live inside a separate account (with a different account number) from your spending/checking account.

It’s not a traditional savings account, but technically a high-yield checking account that earns a variable interest rate, 1.2% APY as of June 2020. (Variable interest rates fluctuate with the market.) That’s 20 times the national average APY for savings accounts of 0.06%, reported by the FDIC.

You can fund your Protected Goals manually or automatically by:

  • Transferring money from your Simple checking account.
  • Setting up an automatic funding schedule to transfer money from your Simple checking account periodically (like when you’re paid).
  • Transferring money from a third-party bank account.
  • Rounding up purchases to the next dollar and depositing the digital change into savings.
  • Turning on the “IRS Payments Rule” to automatically set aside a portion of your tax refund.

Opening a Protected Goals account is easy: Just set up a savings goal in your Simple account. No minimum deposit, no fine print. You’ll see your Protected Goals balances and timelines alongside your checking account balances.

Because your Simple savings account is technically a checking account, it doesn’t face the typical restrictions on withdrawals you get with traditional savings.

You can transfer money out of the account into your checking account or into third-party accounts as needed. But, because Simple tucks it away from the money you use for expenses and spending, it’s easy to keep it out of sight and out of mind.

Certificates of Deposit

CDs are a way to guarantee a return on your savings.

You can purchase CDs of at least $250 and hold up to five CDs with a combined balance up to $250,000.

Simple CDs lock in a 1% interest rate for 12 months. After seven days, you can make an early withdrawal anytime of your full CD balance, including accrued interest, with no penalty fee.

Convenience: Online-Only Banking

Grade: A-

Any online-only bank tends to be convenient because of its mobile technology and 24/7 availability — as long as you don’t rely on in-person banking or cash deposits.

Simple doesn’t operate any brick-and-mortar branch locations, but it does give you access to live customer service through a live phone line or chat.

From your account online or in the Simple app, you can see your transaction and deposit history; and manage your expenses, savings goals and linked accounts.

ATMs

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A Simple account gives you access to the Allpoint network of 40,000 ATMs for free. You can withdraw cash without paying a fee to Allpoint or Simple.

You can’t deposit cash via ATM.

Shared Accounts

Simple’s shared account option offers an added convenience for anyone who wants to use both an individual and joint account — for example, to set up “yours,” “mine” and “ours” finances in a relationship, or to share expenses with a roommate in an apartment. You can switch between accounts with one click and instantly transfer money between your individual and shared accounts.

If you prefer to use only a joint account, it’s a little annoying that Simple requires every user to open an individual account first. So, even if you only ever use the shared account, you and any other people on the account will each have an additional account in your names.

Mobile Banking: Simple App

Grade: B+

When it comes to mobile banking, an online-only bank really has to go above and beyond. After all, it’s literally the only way you have to access and control your money.

Simple’s smartphone mobile app lives up to that mission, offering:

  • Safe-to-Spend balance and transaction history.
  • Balances for Goals and Protected Goals.
  • Expense management and funding.
  • Transfer between Simple accounts or Simple and a third-party account.
  • Mobile check deposit.
  • ATM locator.
  • Customer support via phone or chat.
  • One-click debit card freeze.

And perhaps more importantly, Simple takes security seriously, protecting your information with two-factor authentication to get into the app and bank-level encryption.

Still, users rate the app relatively low: 4 out of five stars on Google Play and 3.9 out of five in Apple’s App Store.

Small Business Banking Options

Simple doesn’t offer small business banking services, but the company has said it’s looking into the option.

In the meantime, consider these alternative banks for small businesses:

  • Wells Fargo Simple Business Checking Account and Business Market Rate Savings Account, loans up to $100,000 and a 1.5% cash-back credit card.
  • Chase Total Business Checking and Business Total Savings, SBA Express line of credit up to $350,000 and Ink Business credit cards.
  • Capital One Spark Business Checking and Savings, and 1.5% or 2% cash-back credit cards.
  • Axos Basic Business Checking or Business Interest Checking, Business Savings, and lines of credit or commercial loans starting at $250,000.
  • Navy Federal Credit Union for business owners who are veterans, active-duty military, employees of qualified government agencies and their immediate family.
  • Azlo for online-only, fee-free business checking.

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Simple Banking Fees

Simple is almost completely fee free. You’ll only spend money on:

  • Foreign transaction fees: up to 1%.
  • Checkbooks: $5 for a book of 25 checks.
  • Out-of-network ATMs: If you use any non-Allpoint ATM, you’re subject to fees the ATM owner charges (but no additional fees from Simple).

All other services are fee free, including:

  • No account maintenance fees.
  • No minimum balance.
  • No overdraft fees.
  • No ATM fees at any of 40,000 Allpoint ATMs.

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Simple Customer Service

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Simple customer support is available by phone, social media, or through the website or app.

  • Phone number: (888) 248-0632, available 9 a.m. to 7 p.m. Eastern on business days, 10 a.m. to 5 p.m. Eastern on Saturdays.
  • Twitter: @simple
  • Chat: Log into your account on the website or app, and send a message.

Simple also publishes a bunch of support articles that may help you find the answer to your question on your own.

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How Simple Works

Online banks are confounding to many people, who wonder whether they’re safe and whether they can provide competitive service with no physical presence.

Here’s the low-down on what’s going on behind the scenes of your Simple bank account.

Is “Simple Bank” a Real Bank?

Simple is a financial technology company that provides financial services as a subsidiary of BBVA USA, an FDIC-member institution.

BBVA holds and insures your money, and Simple provides the technology to make accessing and managing it easy. So an account with Simple is a legitimate bank account!

Is a Simple Bank Account FDIC Insured?

Yes. Simple account funds are held by BBVA USA, which is FDIC insured up to $250,000.

Who Owns Simple?

BBVA Compass acquired Simple in 2014, and Simple functions as a separate business within the international bank, the CEO explained in a blog post at the time.

Josh Reich and Shamir Karkal co-founded Simple in Brooklyn in 2009, becoming the company’s first CEO and CFO, respectively. The company headquarters is now in Portland, Oregon. David Hijirida has been Simple’s CEO since November 2018.

How Does Simple Make Money?

Like a traditional bank, Simple earns money through:

  • Interest: BBVA earns interest by lending money to customers, and Simple customers earn some of that through interest on their accounts. Simple and BBVA split the interest margin — what’s left after you earn your cut.
  • Service fees: When you swipe your debit card, a business pays a fee, which BBVA and Simple split.

Why is BBVA willing to split its earnings with Simple? Because Simple’s user-friendly technology brings in new customers who prefer a convenient, easy-to-use, fee-free online bank over BBVA’s own branch banks.

Does Simple Offer Other Financial Products?

Unlike most financial companies, Simple has been slow to roll out products to complement its bank accounts. Simple doesn’t offer mortgages, personal loans or investing.

In addition to its Safe-to-Spend (checking) account and Protected Goals (savings) account, it offers CDs.

For the convenience of robust mobile banking with a broader suite of products and services, check out these online banks:

  • Ally Bank: high-yield checking and savings accounts with no monthly fees and limited ATM fee reimbursement, home and auto loans, and self-directed or managed investing.
  • Schwab Bank: high-yield checking account with no monthly fees and unlimited worldwide ATM fee reimbursement, and a brokerage account for investors.
  • Discover: high-yield rewards checking account, savings account and Discover credit cards.

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Is Simple the Right Bank Account for You?

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Simple offers technological functionality that’s lacking with many traditional banks and even many competitor online-only banks. But it’s offerings are slim compared with most financial services companies.

Whether it’s the right fit for you depends on your lifestyle and financial goals.

Simple might be right for you if:

  • You prefer the easy access of online and mobile banking over in-person branches.
  • You like using budgeting apps.
  • You like envelope budgeting but don’t often use cash.
  • Your biggest question about your budget is usually, “Can I afford this?”
  • You’re mostly paid through digital payments or direct deposit.
  • You share expenses with someone but want to keep a separate bank account.

Simple might not be right for you if:

  • You prefer the personal touch of your local bank teller or loan officers.
  • You’re often or mostly paid in cash.
  • Your expenses vary from month to month.
  • Your income and paydays vary significantly from month to month (like gig workers or freelancers).
  • You only want to open a savings account.
  • You want to manage your loans, investments and bank accounts all in one place.
  • You put most of your spending and expenses on credit cards.

Interested? To open a Simple banking account:

  1. Sign up online or through the app by creating a username and entering your email address.
  2. Enter personal information, including your location, birth date and Social Security number to verify your identity.
  3. You’ll automatically get an individual Safe-to-Spend account and have the option to add individual Protected Goals.
  4. To open a joint account, the other person needs to sign up and open an individual account. Then either of you can initiate a shared Safe-to-Spend account and invite the other to join. You’ll have the option to add shared Protected Goals.

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Our Bank Review Methodology

The Penny Hoarder’s editorial team considers more than 25 factors in its bank account reviews, including fees, minimum daily balance requirements, APYs, overdraft charges, ATM access, number of physical locations, customer service support access and mobile features.

To determine how we weigh each factor, The Penny Hoarder surveyed 1,500 people to find out what banking features matter most to you.

For example, we give top grades to banks that have low fees because our survey showed that this is the No. 1 thing you look for in a bank. Because more than 70% of you said you visited a physical bank branch last year, we consider the number of brick-and-mortar locations. But more than one-third of you use mobile apps for more than 75% of your banking, so digital features are also considered carefully.

Ratings are assigned across the following categories:

  • Personal checking accounts
  • Personal savings accounts
  • Small-business banking
  • Convenience
  • Mobile banking

Credit card and loan products are not currently considered.

Jamie Cattanach’s work has been featured at Fodor’s, Yahoo, SELF, The Huffington Post, The Motley Fool and other outlets. Learn more at www.jamiecattanach.com.

Dana Sitar contributed to this report.