The banking industry has helped people store units of value for centuries, starting in 2000 BC. Banking has gone through several shifts over the millennia, with challenger banks representing the next milestone. These banks can provide higher interest rates on savings accounts and have fewer fees because of their business models. Current and Chime are two thriving digital banks that can help you save money and get closer to your financial goals. We will highlight how these two banks compare and help you determine which bank is better for your objectives.
The Rise of Challenger Banks
Established business models are vulnerable to disruption. The iPhone decimated Kodak’s business, a brand that previously seemed pristine. Netflix changed how people watched movies and resulted in Blockbuster’s demise. Challenger banks pose a challenge to traditional banks. They aim to provide consumers with better choices and features.
Challenger banks do not have any physical branches. This distinction significantly reduces their overhead, enabling them to pass their savings on to consumers. Some consumers still value brick-and-mortar banks, but online banking is disrupting the traditional model. Current and Chime each has millions of users and admirable growth rates. Even traditional banks have enhanced their online banking experiences. As people visit traditional banks less often, challenger banks look more appealing since they offer perks traditional banks could never provide.
What is Current?
Current is a fintech company that provides banking services through Choice Financial Group, Member FDIC. Current touts its services as the future of banking, and its users seem to agree. The mobile app has accumulated over four million members and has grown rapidly since Stuart Sopp founded the company in June 2015. Current has experienced an 8x growth in users from 2019 to 2022. Current has headquarters located in New York.
Current boasts billions of dollars in assets and has over 10,000 employees. This vast staff allows Current to maintain 24/7 customer support. If you have any questions about your Current account, the team can answer them quickly.
What is Chime?
Chime is a fintech company that provides banking services through The Bancorp Bank or Stride Bank, both members of the FDIC. Chris Britt and Ryan King founded the San Francisco-based challenger bank in 2013. The co-founders launched the company after not finding a checking account they liked. These entrepreneurs created a product that solved a problem they experienced and helped many users in the process.
The company raised enough money to amass a $14.5 billion valuation in September 2020. Over 12 million people use Chime for their online banking experience. Chime’s user base primarily consists of people under 35, reflecting online banking’s growing appeal with millennials. Over 60% of Chime’s user base is in that age bracket.
Comparing Current vs. Chime
Current and Chime are revolutionizing the banking industry. Millions of users have flocked to each challenger bank, and many of their users are under 35, suggesting the online banking trend will continue to grow. Some people open bank accounts for multiple challenger banks, but if you want to keep your finances in one place, you should pick the bank that best suits your needs. We will compare key features across both challenger banks to help you determine the best digital banking solution for your finances.
Interest rates can make a big difference in how much money you pay and receive in your lifetime. For example, an extra percentage point on a mortgage can increase your payment by hundreds of dollars each month. Unfortunately, Current and Chime do not offer personal loans, but it’s good to stay informed on the APY you can earn from your money.
Current has a more attractive APY for their savings accounts. You will earn 4% APY from your Current savings account, while Chime will only yield 2% APY. However, Current limits free users to a single savings account with a $2,000 maximum balance, and Premium members only get three savings accounts (max $6,000 balance across those accounts).
Chime does not have account balance maximums. Therefore, you will make just as much with $12,000 in your Chime savings account as you would with $6,000 across Current savings pods. While you have to pay a $4.99/mo Premium member fee to get three savings pods instead of one, Premium account holders get additional advantages we will cover shortly.
Fees and Costs
Current has an optional $4.99/mo Premium member fee. Premium account holders can access Current Overdrive, which provides overdraft protection of up to $200 and other great features. Chime provides the same protection of up to $200 on their accounts. Both challenger banks adjust your overdraft protection based on your account’s history. In addition, they both automatically apply your next checking account deposit to cover the overdraft.
Current requires $500 in direct deposits each month to qualify for the $200 overdraft protection. Chime members need to make $200 in deposits over the past 34 days to qualify for SpotMe, Chime’s overdraft protection service. Fulfilling the minimum does not guarantee $200 in overdraft protection right away. You can speed up your path to $200 in overdraft protection through SpotMe Boosts with your friends. This perk lets you increase a friend’s overdraft protection by $5, and they can return the favor on their Chime account. Chime members can send and receive up to four Boosts per month. They last until the first day of the next month.
Current users have to pay $2.50 for out-of-network ATM fees, but Current minimizes the likelihood of this scenario through its 40,000 in-network ATMs via Allpoint. Current also has a $3.50 transaction fee for adding cash. Chime also charges $2.50 for out-of-network ATM fees, but they have over 60,000 in-network ATMs through Allpoint. Both mobile banking apps have built-in maps that let you see the locations of their in-network ATMs.
Current and Chime have no minimum account balance requirements, monthly maintenance, or hidden fees. These are common trends for online banks. Other financial institutions have these fees in place because they have more expenses to cover than online banks. Fewer fees are one of the many reasons more people are using mobile apps like Current and Chime for online banking.
Checking and Savings Account
Current and Chime offer checking and savings accounts through their partnerships with FDIC-insured banks. You can only store $10,000 across your Current checking accounts, while Chime has no limit in place. Both accounts have FDIC insurance which protects your funds up to $250,000. Both companies let you get paid up to two days early with direct deposit. They both offer debit cards connected to users’ checking accounts.
The Current debit card offers rewards for its users. You can earn up to 15 x points on qualifying purchases. The Chime debit card does not have rewards attached to it. If rewards are a big deal for you, and you don’t want to get a credit card, the Current debit card is the better choice.
Rewards and Perks
The Current debit card gives you points back on every purchase that you can exchange for rewards in the Current Shop. Current members can exchange points for cash or other items. The Chime debit card does not offer rewards, but you can get 1.5% cash back on every purchase if you use their credit card. The Chime credit card does not have interest rates or annual fees.
If you prefer using a debit card, Current is the better choice for rewards. Their debit card provides rewards, and you won’t have to worry about falling deep into credit card debt. However, Chime makes more sense if you prefer using a credit card. Their credit cards have more generous terms, and your transactions get reported to the major credit bureaus. A Chime credit card can improve your credit history and help you qualify for better loans in the future. Current does not offer a credit card.
Current and Chime are secure online banks with FDIC insurance. Their cards have EMV chips which bolster security and online features that protect your cards. Both challenger banks let you freeze and unfreeze your cards at any time to make sure the wrong people don’t tap into your checking account. Current and Chime both have two-factor authentication and fingerprint authentication. Current also has Face ID authentication.
Current and Chime each has 24//7 customer service that can reliably answer your questions. You can submit a support ticket or enter a quick chat through Current’s platform. Chime has email support and a phone number. Current does not have a customer support phone number at the moment.
Current and Chime have robust mobile apps that their users enjoy. Current has over 130,000 reviews in the App Store, averaging 4.7 stars, and over 139,000 reviews in Google Play, averaging 4.6 stars. Chime has over 561,000 reviews in the App Store, averaging 4.8 stars, and over 449,000 reviews in Google Play, averaging 4.8 stars. Chime has a slight edge on Current with average ratings across the App Store and Google Play, but the difference isn’t large enough to be a decisive factor. Each online bank has a large user base and many happy members.
User Experience and Design
Current and Chime have educational resources to help you grow your wealth and use key features within their apps. Each challenger bank offers a seamless user experience, but Current is closer to an all-in-one solution. You can track spending, buy crypto, and access other insights in the same app. However, Current members have to get comfortable with the app since the website is primarily educational resources. Chime account holders can do their banking on the mobile app and website.
Current and Chime each have distinct features that make them compelling banking choices. We have highlighted several features below:
- Crypto trading: Buy and sell up to 30 cryptocurrencies right from your Current account. Crypto is a volatile asset that has rewarded long-term investors. It can help diversify your portfolio as a high-risk, high-reward asset. Having crypto in your Current account means you can sell crypto for cash and use it right away for an emergency expense. You don’t have to wait for a money transfer from your brokerage account.
- Spending insights: Current tracks your debit card spending and can provide insights that help you lower your expenses and save more money. Current makes it easier to discover the unused subscriptions and costs you don’t need in your life. Current will send you a notification for each purchase so your finances get the attention they deserve. You can turn off the notifications feature if you want to do so.
- Teen Banking: Parents and guardians can create bank accounts for their teens. A bank account gives your teen more financial flexibility while giving parents some control. You can monitor your child’s spending activity and block certain merchants from your child’s debit card. Current lets you create an account for a 13-17-year-old teen. Giving your child earlier access to a bank account can help them achieve financial freedom sooner and become disciplined with their money.
- Gas hold refunds for premium members: Current automatically handles your gas holds. You won’t have to worry about them dragging your balance and risking an overdraw. Gas holds normally last up to 72 hours and restrict your purchasing power during that time.
- Credit Builder: You can rebuild your credit with a secured “Credit Builder” credit card from Chime. The card has no annual fee or interest. Chime does not check your credit score when you apply for a card. Most financial institutions do hard credit checks, which hurt your score and make it more difficult for consumers with poor credit to obtain credit cards. Chime does not have a minimum security deposit requirement, but you need to put some money into that deposit to get a secured credit card.
- Reporting to the major bureaus: Chime reports your credit card activity to the major bureaus (Equifax, Experian, and TransUnion). This reporting can improve your credit score if you make payments on time. You should not work with a credit builder or credit card company that will not report your activity to the major credit bureaus.
- Peer-to-peer transfers to anyone: You can transfer money to anyone with Chime, which provides more flexibility. Current’s peer-to-peer transfers only apply between Current members.
- Second chance banking: While it’s easy to get a bank account with Current as well, Chime offers accounts specifically for people seeking second-chance banking. Second-chance banking accounts are for people who have bad banking history with a previous account. Chime does not use reports from ChexSystems to assess your application, and they do not punish you with monthly fees for your second chance banking account (most financial institutions offering these accounts have higher fees and stiffer account requirements).
Signing Up for an Account
Current and Chime offer straightforward signup processes that only take a few minutes. You can sign up for either bank through their mobile app or website. You will have to provide your name and email address to get started. You should have a personal ID and your social security number ready when it’s time to open a bank account.
The Bottom Line: Current vs. Chime
Current and Chime each offer excellent online banking experiences. Mobile banking apps are growing rapidly, and while they have many similar features, the few differences they have should guide your decision. You should review your financial objectives and determine which challenger bank better suits your needs. While each person is different, here are some things to consider when making your decision.
Chime is better for consumers who want to rebuild their credit with a secured credit card. Chime does not conduct credit checks for their cards and reports all activity to the major credit bureaus. Chime does not have annual fees or interest for its secured credit cards. While Chime has a lower APY for its savings accounts (2% APY), they don’t have limits. Current does not let you hold more than $10,000 in your account, while Chime has no maximum. The 2% APY is lower than Current’s 4% APY, but if you store $20,000 at 2% APY, you make more than storing $6,000 at 4% APY and paying for a Current Premium membership.
Current is better for consumers who want a cashback debit card. These consumers do not want to go into credit card debt and want to rely on debit cards instead. Current also has a better APY for their savings accounts at 4%, but you will need a Current Premium account to get 4% APY on up to $6,000 (free accounts get 4% APY on up to $2,000). However, if you want an all-in-one money management experience and the ability to trade crypto, Current may be right for you.
Current and Chime each have strengths and weaknesses. If you want to do banking with Current, you can create an account by visiting their website or downloading the mobile app.