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Simple Bank is a BBVA partnered bank that was founded back in 2009 by Josh Reich and Shamir Karkal. Based in Portland, Oregon, and built on the premise that banking should be simple, Simple Bank has gone on to develop an innovative platform that fuses banking and budgeting.
Simple Bank offers two main products in its banking operations:
- a high-yield online checking account, and a
- certificate of deposit (CD)
The company also offer a very intuitive budgeting feature in its web and mobile platform.
In this Simple Bank review, we will discuss the pros and cons of Simple Bank’s products, including its budgeting application. We will assess those products and see how they stack up against the competition.
Who Should Use Simple Bank?
There are many fee-free online-only banks, but there aren’t many banks out there with an integrated budgeting tool that lets you manage your finances effectively, and helps you save for a goal.
Simple Bank’s online checking account also comes with a free debit card, an innovative mobile app, and access to customer support.
This bank is an excellent choice if you currently pay for a budgeting app to manage your money. Simple Bank will give you a free checking account and a free budgeting tool to go with that account.
Types Of Account At Simple Bank
You can open two major types of accounts at Simple Bank: an online checking account (individual or shared) and a CD.
To open an account with Simple Bank, you need a valid Social Security number and a U.S. address. Simple Bank accounts are not available to foreign individuals.
Simple Bank Online Checking Account
The internet has made online-only banks prevalent in the financial services industry. But few online-only banks offers the services that Simple Bank online checking account provides. Below are some of the benefits of opening a Simple Bank checking account.
- A Free Simple Visa Debit card
- Mobile Check Deposit from Simple Bank’s mobile app
- Ability to link an external account
- Instant free money transfer to other Simple Bank members
- Integration with third-party apps like Square, Venmo, and Paypal
- Ability to turn off the debit card if lost or stolen
- Integrated budgeting tool
- No monthly maintenance fees
- Free replacement debit card
- Over 40,000 fee-free ATMs in the Allpoint network
- Link up to five external accounts for ACH transfers.
Round-Up Rules
Simple Bank has a feature that easily helps you to save money without noticing, and here’s how it works.
With Round-Up rules, you can let Simple Bank round up all your purchases to the nearest full dollar amount and deposit the difference into a protected goals account.
For example, if you purchase a cup of coffee for $4.60, Simple will round the purchase up to $5 and deposit the difference of $0.40 in your Protected Goals Account. Over time, the money will add up to something substantial.
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Safe To Spend Account
Simple Bank does not have a savings account component to its checking account as most banks do. But that doesn’t mean you can’t “save” money with Simple.
Within the online checking account, you can partition your money as “Safe to Spend,” and “Protected Goals.”
“Safe to Spend” means funds in that section of your account can be spent using your debit card, or direct debit. Funds in the Protected Goals section are walled-off, and cannot be spent unless you transfer it out of “Protected Goals” to “Safe to Spend.” In other words, “Protected Goals” is a savings account of sorts.
Protected Goals Account
Simple is both a banking and a budgeting interface. A Protected Goals Account, as mentioned before, is an account you create to stash money away for a particular goal. The money in this account is not connected to your debit card and is protected from accidental spending. That’s where all the saved-up pennies from your round-up rules get deposited.
Interest credits are also deposited in this account at the end of the month. Also, you can transfer money from “Safe to Spend” into the “Protected Goals” account.
Shared Checking Account
The Simple Bank shared checking account is the same as their regular online checking account except this one is a joint checking account.
This account is suitable for couples who may want to maintain a joint account to pay bills and manage their budget.
The account pays a 1.55% APY on all balances from $0.01 to $20,000 and above. Such APY on a checking account is unusual, which makes this account an excellent choice.
Cons of a Shared Account at Simple Bank
- Because Shared accounts are co-owned; each of the joint owners has the legal right to all the funds in the account and the ability to close it without the other owner’s permission.
- Both owners are responsible for negative balances, and the bank can withdraw money from either owner’s personal account to cover a negative balance in the joint account.
- If one owner dies, the rights to the funds get transferred to the other owner.
Simple Bank Certificate of Deposit (CD)
Simple Bank currently offers a 12 month CD at a 1.00% annual percentage yield–three times more than the national average CD rate, but also significantly lower than what the competition offers.
For example, Marcus by Goldman Sachs offers 1.85% APY on a 12 month CD, requiring only a $500 minimum deposit. Many other banks, especially online-only banks, offer significantly higher APY on CDs than Simple Bank.
If you are looking to lock in a generous fix rate on a 12 month CD, Simple Bank should not be your first choice. Spend some time investigating what the competition is providing. Some notable competitors are:
Simple Bank CD Competitors
| Bank | APY | Duration | Minimum Deposit |
|---|---|---|---|
| Marcus by Goldman Sachs | 1.85% | 12 Month | $500 |
| BMO Harris Bank | 1.85% | 12 Month | $5,000 |
| CIT Bank | 1.65% | 11 Month | $1,000 |
| Capital One Bank | 1.5% | 12 Month | $0 |
| Discover Bank | 1.5% | 12 Months | $2,500 |
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Though Simple Bank does not provide a competitive APY on its CDs, it does have a low minimum deposit requirement. It is noteworthy because most banks require a much larger sum than the $250 Simple Bank requires to open a CD.
Other high points of having a Simple Bank CD account are its no-penalty for early withdrawal policy, and the ability to open up to five CD accounts totalling up to $250,000.
Most banks will charge you a fee as a penalty for withdrawing your money early from a CD. Simple Bank does not penalize you. You can withdraw all your funds from your CD after just seven days of making the deposit.
Customer can also open up to five CD accounts, but not exceeding the total of $250,000. CD accounts at Simple Bank are FDIC insured for up $250,000.
Simple Bank Online Budgeting Tool
Simple Bank has an excellent budgeting interface integrated within its web and mobile application platforms. Within the Simple Bank budgeting interface, you can create several spending categories and budget your funds according to those categories.
Whenever you spend using your Simple Bank debit card, your purchases are automatically categorized according to the spending categories in your budget.
Let’s say you budgeted $300 for groceries. Whenever you buy groceries during the month, your purchase will automatically go against your grocery budget in the Simple Bank app. The app will alert you when you’re about to run out of money in that category, and you can choose to be frugal or to borrow from another category.
The app is based on the zero-based budgeting method, which holds you accountable to assign a purpose to every dollar.
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Simple’s built-in expense tracker is the easiest way to make and stick to a budget. All you have to do is enter your monthly bills and living expenses. Simple will automatically set aside the money you need.
That way, you don’t have to worry about meeting your monthly financial obligations.
Goals: Simple Bank’s Digital Envelopes
Goals are like digital envelopes where you put money in and set it aside every month for a particular goal.
For instance, if you want to take a vacation within twelve months, you can set up a “goal” within the Simple Bank app and put money towards your goal every month.
Pros Of Simple Bank
- All accounts are FDIC insured
- Saving money with Simple is very easy
- No monthly service fees
- Free budgeting tool
Cons Of Simple Bank
- The Bank doesn’t give out loans
- No local branches
- interest rates aren’t competitive
- No safeguards for joint accounts
Simple Bank — How To Open An Account
To open an account with Simple Bank, you will need to be at least 18 years old, with a valid Social Security number, and an address. Once you have those ready, you can apply for an account on Simple Bank’s website.
How To Fund Your New Account With Simple Bank
There are several ways to fund your new account with Simple bank. Below are a few:
- Direct deposit
- Photo and mailed-in check deposit
- Bank transfer
- Wire transfer
- Paypal, Square Cash, Google Wallet and other third-party services
How To Withdraw Funds From Your Simple Account
- Over-the-counter cash advance at your local bank
- ATM withdrawal (it’s free for ATMs withing Simple Bank’s network)
- Cashback at point of sale
How To Contact Simple Bank
Tel. No. +1 888-248-0632
Address:
PO Box 14400. Portland, OR 97293
Final Thoughts On Simple Bank
Simple Bank is an excellent all-in-one banking and budgeting organization. Though the bank does not have a dedicated “savings account,” I would argue that its “Protected Goals” account adequately compensates for that.
The bank is an excellent choice if you want to do away with bank fees, and you want to manage your money efficiently through thoughtful budgeting.
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