Chime Bank Vs Aspiration: The 6 Key Differences

chime vs aspiration

Chime and Aspiration are both excellent choices if you are looking for a digital bank. While both come with benefits for the customers, they have specific products and features that define them.

Here are comparative details of the Chime Bank vs. Aspiration:

  • Chime Bank doesn’t charge monthly account maintenance, minimum balance, or overdraft whereas, Aspiration requires users to make a $10 minimum deposit to open a checking account.
  • While the Chime savings account has no fees, Aspiration Spend & Save plans have a “Pay What is Fair” account which users need to choose a monthly fee starting from $0.
  • With Aspiration, you can get a high 1.00% APY if you sign up to Aspiration Plus, whereas Chime offers an APY of 0.50% on their optional high yield saving account.
  • Chime Bank provides credit card builders, while Aspiration does not.
  • Aspiration customers earn 3-5% cash backs on the basic account and up to 10% on the Aspiration Plus account if they shop within the Conscience Coalition. In contrast, Chime doesn’t have these cashback offers.
  • Unlike its counterpart, aspiration bank operates and offers products as a socially and environmentally conscious financial services company.

From these differences, it’s evident that the two companies have specific products and offers. Here are the reasons to guide you on why you should choose Chime Bank or Aspiration.

My Recommendation

Both Chime and Aspiration have their own benefits to the customer. I recommend Chime for customers who prefer a no-fees digital bank.

Chime doesn’t charge any minimum balance, monthly account maintenance, or overdraft fees. It’s also an excellent choice to build your credit score using their credit score builder card.

On the other hand, Aspiration is ideal for socially conscious customers. Every time you use their credit card, Zero, you get rewards for erasing your carbon footprint. They also plant a tree every time a customer swipes their debit card.

What to Consider When Choosing Between Chime vs. Aspiration

Before you settle on one of these alternatives, here are some of the things you should consider.

  • Fees

Digital banks typically charge lower fees than traditional banks. However, when selecting an alternative, you should check how much costs you’ll incur while managing an account at a certain bank. Chime Bank will cost you less because they don’t charge you a minimum balance for your account and any other fees.

  • Annual Percentage Yield (APY)

If the digital bank has a savings account, you should check the APY percentage. Banks with a higher yield are much better for your savings. Chime has a 0.5% on the Automatic Savings account, whereas Aspiration has 1.00% but only on the premium account, the Aspiration Plus.

  • Early Paycheck

Digital banks like Chime and Aspiration are good options if you want to receive your paycheck two days earlier. Before signing up to a bank, check whether they have a Direct Deposit feature for an early salary.

  • Financial Services Offered

Apart from a checking and savings account, does the digital bank have any other benefits? This is a critical question, especially if you need other banking services such as loans or investment options. For instance, Chime offers up to a $200 overdraft via SpotMe.

  • Convenience

When working with a digital bank, convenience is very critical. You need to consider the functionality of the mobile apps, both on iOS and Android.

You can start by checking customer reviews and ratings on the App Store and Google Play to understand how the apps function. A good app will help you access your funds and carry out transactions on the go.

  • Customer Support

Both Chime and Aspiration have customer service for their clients to reach out when they have an issue. This can be via the website customer support tab, the app, mobile number, or email address.

Why Should You Choose Chime

chime bank

Here are some reasons why you should choose Chime as your bank.

  • Zero Fees

If you open an account with Chime, the bank doesn’t charge monthly, minimum, or overdraft charges. They also don’t charge international transactions and ATM withdrawals as long as it’s within their network. Unlike Aspiration, you won’t need to pay an activation fee once you open an account.

  • High Yield Savings Account

Chime bank gives all its customers a high yield at 0.5% APY. This rate is higher than most traditional banks. If you want to open a savings account, Chime has a better rate.

  • Mobile App

On the App Store, Chime mobile app has a high customer rating of 4.8/5 and a 4.6/5 on Google Play. Based on these reviews by customers already using the app, it’s a clear indication that the app functions exceptionally well. Through the app, you can access all the Chime banking services online. You can monitor your daily transactions, savings, and account balances.

Why You Should Choose Aspiration

aspiration

Let’s examine some of the reasons why you should choose Aspiration.

  • High APY %

As a member of Aspiration Plus, customers can earn 1.00% APY. This is a good yield on a savings account and a much higher rate than other financial institutions.

  • Cash Back

With the Spend & Save account, customers get cashback on some purchases. If you sign up to Aspiration Plus, you can earn as much as 10% cashback, while Pay What Is Fair members get 5% back when they purchase products from merchants that are part of the Conscience Coalition.

  • Socially Conscious

Aspiration is focused on saving the planet. They tailor their rewards around these products. They automatically offset the carbon dioxide from every gallon of gas you purchase using Aspiration Plus.

The Planet Protection feature adds up all the gas purchases to help counter climate change. Therefore, you can build your finances as you take care of the environment.

Chime Bank History

chime bank

Founded in 2013, Chime started as a financial technology company. The bank was started by Chris Britt and Ryan King, who wanted to develop a digital bank to serve as an alternative to traditional banking.

Chime Bank headquarters are in San Francisco, California. Bancorp Bank provides a banking license.

Chime’s financial products were developed with Millenials and young adults in mind. The two founders created an innovative approach to banking for the population struggling to establish a banking relationship. The bank partners with other regional banks to develop competitive and low-cost financial products that aren’t available in traditional banks.

Their business model doesn’t rely on overdraft, minimum balance, monthly service, or other consumer fees. Chime is more focused on the consumer’s best interest.

As part of their growth strategy and focus on young adults, Chime acquired Pinch in 2018. This move was critical for this younger generation, especially in helping them improve their credit scores by making timely rent payments to credit institutions. By February 2020, the Fintech company had total funding of $1.5B and 8 million account holders.

How Chime Works

Chime is an exclusively digital bank that doesn’t have any physical branches. As one of the top neobanks in the U.S., they offer their customers tons of benefits at no cost. With customer satisfaction as the primary goal, this financial institution doesn’t rely on bank fees like other traditional banks.

With a Chime debit card, you can make purchases in-person and online without incurring any fees. Chime makes money from the merchant who pays a small percentage of the sale to Chime. The bank can make some money to ensure their clients don’t incur any transaction fees from these charges.

Chime also generates cash from the fee-free savings account. They charge an APY interest rate on the account balance. In addition, Chime customers can withdraw some money from the 60,000 plus ATMs. However, if the ATMs are outside the bank’s network, customers are charged a $2.50 fee.

Features of Chime Bank

Chime Bank has the following features.

  • Chime Credit Builder

If you have a poor credit score, the Chime credit builder will help you improve it. Unlike traditional secured credit cards, it doesn’t have an interest, no annual fees, or credit checks during application. Once you pay your monthly balance on time, Chime reports to the major credit bureaus.

  • SpotMe

With SpotMe, you can get an overdraft at no fee from Chime Bank. This feature allows you to overdraw any time you make a purchase using a debit card to avoid getting into negative balances.

To qualify, your account should have direct deposits of $500 or more within the past month. Chime gives an overdraft limit of $20 – $200+, adjusted depending on your account history and use. SpotMe doesn’t require a savings account or any extra fees.

  • 60,000+ Fee-Free ATMs

Chime has a larger fee-free ATM network than the top 3 national banks combined. Using the app, customers can find more than 60,000 fee-free ATMs at stores such as CVS Pharmacy, Walgreens, and 7-Eleven.

  • Early Paycheck

If you receive direct deposits to your Spending Account, you can access your paycheck up to two days earlier. You’ll get paid as soon as the cash is available, which is usually earlier than other banks.

  • Savings Round-Ups

The Savings Round-Ups feature allows the bank to round up your change to the nearest dollar when you make purchases. The extra cash is deposited into the customer’s Savings Account.

  • Automatic Savings

With the built-in Automatic Savings feature, customers can save cash easily to reach their goals faster. For instance, you can automatically transfer a percentage of all your paycheck directly to the savings account.

  • High APY

Compared to other savings accounts from different banks, Chime offers a high APY of 0.50%. This high-interest rate is crucial if you need to grow your cash much faster and within a short period.  

History of Aspiration

aspiration

Aspiration was founded in 2013 by Joseph Sanberg and Andrei Cherny but begun operations in 2015. This online financial services company is headquartered in Marina del Rey, California. Like other digital companies, it offers investment products and branchless banking services.

Aspiration stands out from other financial institutions because of its focus on socially and environmentally conscious operations. They reward and support businesses that take care of the planet and don’t use the client funds to finance fossil fuel projects.

Because Aspiration is not a bank, their deposits are held by the partner banks. Furthermore, the Aspiration Zero Mastercard is issued by Beneficial State, Member FDIC. Just like other banks, the deposits are FDIC-insured for up to $250,000.

Customers earn cashback rewards on their purchases, which also includes bonus rewards at socially conscious businesses.

How Does Aspiration Work?

Although it’s not a licensed bank, Aspiration provides customers with financial products such as debit cards from Mastercard, fee-free ATM withdrawals at Allpoint ATMs, and high-yield savings accounts.

To sign up for an account is pretty straightforward. You’ll need to provide your email address and set up the account by making a minimum deposit of $10. Once your account is active, the company provides you with a virtual card to use for your transactions as they mail a physical card.

Before you open an account with Aspiration, you need to decide whether you want a basic account or a premium one, known as Aspiration Plus. The basic one allows the customer to pay a low fee starting from $0, while the premium one costs about $7 per month.

Features of Aspiration Bank

As a company that focuses on the environment, what are some of the key features? Here are some of them.

  • Aspiration Plus

This is a premium account for Aspiration customers. Once you choose this alternative, you need to factor in the charges at $7 per month.

The interest rate on the savings is set at 1.00% APY, which is a high yield. Customers who also sign up with this enjoy 10% cashback on purchases at select companies that focus on planet protection.

  • Aspiration Spend & Save Basic Plan (Pay What Is Fair)

This feature is the second option for the Spend & Save account. With this product, customers can choose their monthly account maintenance fee from as low as $0.

This account offers 3-5% cashback on purchases at socially conscious companies. To motivate customers to pay more for their services, Aspiration gives a small incentive by donating 10 cents of every $1 paid in fees to charities.

  • ATM Withdrawals

Aspiration has a network of more than 55,000 Allpoint ATMs, which is more than Wells Fargo, Chase Bank, and Bank of America combined. Withdrawing cash from these machines is absolutely free. However, if you use another type of ATM, you are more likely to be charged a fee, and Aspiration won’t give any reimbursement fees.

But with an Aspiration Plus account, the company will pay one reimbursement each month for out-of-network ATM transactions.

  • Early Paycheck

Similar to Chime Bank, Aspiration also has an early paycheck feature for its customers. If you sign up for a direct deposit, you can get your cash two days earlier.

  • Zero Credit Card

Zero is a credit card from Aspiration that rewards customers for erasing their carbon footprint. If you shop using this credit card, the bank uses the extra fees from the merchants to plant trees and doubles the customers’ cash back rewards when they reach carbon zero.

  • Cash Back Rewards

To earn cashback, customers must shop with the Conscience Coalition partners. These are the businesses involved in taking care of the environment. The basic account earns 3-5% cashback, while the Aspiration Plus premium account earns the customer 10% in cashback rewards.

  • Mobile App

Aspiration has a well-functioning app rated at 4.7/5 on the App Store and 4.0/5 on Google Play. With the app, you can track all the transactions and savings at no extra cost. If you want to deposit a check, you can take the image with your phone camera and use the app to upload the image.

Summary

Chime and Aspiration are both good options for a digital bank. Before deciding on the best alternative, carefully analyze the distinct features. If you are looking for an online, low-cost, and convenient bank, Chime is a good option.

Aspiration is a good alternative if you prefer an ethical bank that supports a sustainable cause but without the pressure of getting competitive services like other neobanks.

Related Questions

  • Is Aspiration a Real Bank?

No, it does not hold a banking license. However, it’s safe for your money because the funds are held at Aspiration’s partner banks, which are FDIC-insured.

  • Does Chime Charge any Fees?

Chime will not charge any fees for sign-up, overdraft, monthly maintenance, transaction, or card replacement. The company only charges $2.50 when a user withdraws cash from an out-of-network ATM.