Chime and Marcus are some of the most popular digital banks in the US. They both have around 14 million customers each, which means they are doing something right. But which one is for you?
Here’s my short verdict:
If you’re looking for a checking and savings account with a high-yield APY, Chime is for you. It also has a credit builder program. Marcus, on the other hand, doesn’t have a checking account but offers various high-yield savings products as well as an investing platform, loans, and credit cards.
Let’s learn more about these online-only banking accounts and see just how much different they are (or aren’t).
Chime is a fintech company out of San Francisco that was founded in 2013 by Ryan King and Chris Britt. The company has partnered with The Bancorp Bank and Stride Bank to issue its debit and credit cards as well as hold clients’ funds and have them FDIC insured for up to $250,000.
The company got into trouble a couple of years ago for describing itself as a bank, which it is not. However, Chime is one of the most successful digital banking apps in the world, with more than 14 million customers in a very competitive market, and has been funded to the tune of $2.3 billion, giving it a valuation of almost $25 billion.
How to Open a Chime Account
Digital bank accounts are notoriously easy to open and often require no paperwork. Chime is no different. Simply visit the Apple App Store or Google Play Store to download the app and register with your email, phone number, SSN, and a few other personal details.
Alternatively, you can visit the Chime website and complete a signup form. You have to be a US resident and be older than 18.
Marcus by Goldman Sachs is an off-shoot of Goldman Sachs USA. The digital bank was created in 2016 and is one of the more popular digital banks in the country. The bank reported a whopping $100 billion in deposits in 2022 and $16+ billion in cards and loan balances.
However, there’s a dark side, as this consumer banking platform has also racked up $4 billion in losses for Goldman Sachs and is been criticized for not releasing the checking account yet.
How to Open a Marcus Account
Opening a Marcus Savings account is easier than ever. Simply navigate to the website and enter basic personal information. After that, transfer some funds and begin saving.
Pros & Cons
|No hidden fees||No-penalty CD option|
|Get paid up to 2-days early||150 years in the financial business|
|Credit Builder Card||No minimum deposit in savings account|
|Automatically grow your savings||FDIC-secured|
|Fee-free overdraft||High-yield CDs|
|60,000 fee-free ATM locations||Loans|
|FDIC-secured||Available in the UK|
|Limited services||No checking accounts|
|Limited cash deposit locations||No debit or ATM cards|
|No mobile check deposits|
|No monthly or annual fees||No monthly or annual fees (except for investing)|
|No minimum balance||No minimum balance|
|Free to open an account||Free to open an account|
|No fee for using debit card||No debit cards|
|60,000+ fee-free ATMs||N/A|
|$2.50 out-of-network ATM fee||N/A|
|N/A||0.25% investing management fee|
Accounts & Cards
The main Chime product is the no-fee online checking account that comes coupled with a Visa debit card which you can use for in-store and online payments as well as to withdraw cash at 60,000+ fee-free ATMs.
Another great thing about Chime is that you can build your credit with their Credit Builder Credit Card. There are no credit history checks before applying for the credit card. Plus, there are no annual fees or interest, and no minimum deposit is required.
When you use the Credit Builder card for everyday purchases and make regular, on-time payments, Chime will report your progress to the major credit bureaus.
And lastly, there’s the saving account with a 2.00% APY, where you can save on autopilot.
Marcus doesn’t have a checking account yet, but it has four different CDs and an Online Savings Account. They all come with an APY north of 3.00%. You can read more on that below.
Additionally, Marcus offers an investing platform called Marcus Invest that lets you start investing with as little as $5.
There’s also a personal loan service that’s simply called MarcusPay, and lets you pay a no-fee, fixed-rate installment loan. Similar to Buy Now, Pay Later.
- No deposits (your first payment is only due at least a month after the purchase)
- No fees (pay for purchases and interest over time)
- A fixed interest rate (from 8.99% to 29.99%)
- Flexible loan options (ranging between 6 and 18 months)
Getting MarcusPay is easy. When you’re ready to checkout with your purchase, you will see MarcusPay as a payment option. You can use this payment option for qualified purchases that are between $300 and $10,000.
To apply for MarcusPay, you have to have a valid SSN or Tax ID Number and must be 18+. For those that live in Alabama, they must be 19+, and those in Mississippi or Puerto Rico must be 21+.
Additionally, Marcus offers you to consolidate your existing loans, which can help you save money if you can get a lower interest rate on the debt.
Typically, users can merge multiple debts into one, commonly with a credit card balance transfer, home equity loan, or debt consolidation loan.
Lastly, there are three different credit cards that are closely connected to GM and their vehicles:
- My GM Rewards Card
- GM Extended Family Card
- GM Business Card
You can earn 7x points on purchases at GM, 4x everywhere else, and redeem these points on General Motors vehicles, services, and other perks and benefits.
Credibility & Security
Security is the most important aspect of banking. After all, if you don’t trust the bank to store your life savings, you’re never going to open an account or be comfortable if you do.
Both Chime and Marcus have formidable security traits and are comparable in privacy, security, and safety.
Chime allows users to instantly block suspicious transaction behavior with a simple click on the app. When you turn on notifications, you receive alerts every time a transaction goes through, so you’re always one step ahead if a hacker places a fraudulent charge on your card.
Chime also secures your funds with FDIC. Through the Bancorp Bank or Stride Bank, Members FDIC, your account is insured for up to $250,000.
Additionally, since Chime uses a Visa card, your Visa account falls under the protection of Visa itself; Visa’s Zero-Liability Policy protects all unauthorized purchases.
On the other hand, Marcus protects your information with multi-factor authentication, SSL encryption, the use of firewalls, and other safeguards. The bank uses only the most secure systems to access your accounts, and they monitor their networks around the clock with an elite security team.
Among the tools used to create a robust security system are:
- Encrypted Networks
- Multi-factor Authentication
Additionally, Marcus does have FDIC insurance through its parent company Goldman Sachs Bank USA. That means that funds in your Online Savings Account and CD accounts are insured for up to $250,000, which is the maximum.
Chime doesn’t have any options for investing, and there are no plans to introduce them, as far as it’s known.
On the other side, Marcus offers investment portfolios that were created by experts at Goldman Sachs. These portfolios can also be easily customized.
You can start investing from as little as $5 in a managed portfolio that’s recommended for your risk tolerance and timeline.
So how does this exactly work?
You start by answering a couple of questions that will help get you matched with a portfolio. The portfolios range from conservative to moderate to aggressive, and you can choose from three themes:
- Core (tracks market benchmarks)
- Impact (portfolio avoids sectors like coal, tobacco, and firearms)
- Smart Beta (invests in Goldman Sachs ETFs)
The portfolio management fee is 0.25%, deducted from your account every quarter. On an average daily account balance of $5,000, the fee would be $12.50 per year.
But what if you have a lot of money? If your average balance is $200,000, you’ll be paying $500 per year.
Chime has one Savings Account type that has a 2.00% APY (annual percentage yield). That’s much more than traditional banks that offer around 0.10%. There are also no limits or maximums on the interest that you can earn with Chime.
Saving is also very easy, dare I say effortless. The “Save When You Spend” feature will round up your every debit card transaction to the nearest dollar and move the spare change to your Savings Account. This makes it easy to save on autopilot.
Additionally, Chime lets you save when you get paid, too. The “Save When You Get Paid” feature automatically transfers 10% of every direct deposit of $500 or more directly into your Savings Account.
These two features can boost your savings without you having to think about it all the time.
Marcus also has excellent savings features that are even better because the APY rate for the Online Savings Account is even higher than Chime’s.
To start saving money with Marcus, there are no fees or minimum balances. You can also link other bank accounts to your Marcus account to make both incoming and outgoing transfers.
Additionally, you can transfer money on the same day up to $10,000 both to and from other banks.
As we already mentioned, the savings accounts are FDIC insured, and customer service representatives are available 24/7 to assist you with any issues you might have with your account.
To find out exactly how much you can potentially save, visit Marcus’ interest calculator and compare what interest you could be earning with Marcus versus other popular banks such as Citibank, Wells Fargo, BofA, and Chase. There’s a good chance that you’ll be earning more interest with Marcus.
Apart from the Online Savings Account, there is also the Rate Bump CD, with a 20-month term with an APY of 3.60%, and the High Yield CD, with a 12-month term and a 4.00% APY. The latter can go up to 4.25% APY for a two-year term.
Why You Should Choose Chime
Convenient Banking App
Digital banks usually have excellent apps and Chime is no different.
The Chime app tracks account balances, daily transactions, and savings from anywhere. Plus, you can send money to your friends and family using Pay Friends for free. A very convenient and fast option for Chime and non-Chime users.
Get Paid Early
Chime allows you to get paid early – up to two days before your direct deposit clears. Unlike with traditional banks, you get your money faster and, as a result, get ahead of your bills and rent.
How do you set up direct deposit? Like with everything else with Chime, it’s easy and fast to set up direct deposit.
When you open an account through Chime, you can email yourself a pre-filled direct deposit form that you can hand over to your employer. It should all just take a few short minutes to complete.
Chime also offers a fee-free overdraft with SpotMe. While you may have to visit their website to understand if you are eligible, this is a fantastic tool that allows you to avoid pesky overdraft fees.
If you’re a little bit in the red, Spotme will do exactly that: Spot you – up to $200.
Whether your friends and family have the Chime app or not, they still get paid from you by you with no cash-out fees. They simply input their debit card number, and the money is wired directly into their account through a secure money transfer.
The transfer is instant, and your friends and family will receive the money request within seconds.
Why You Should Choose Marcus
App With Intuitive Design
Track your financial goals and watch your financial progress in real-time when you use the Marcus App. Check your account balances, schedule transfers to and from other banks, make loan payments, and more with a simple click of a button.
Plus, their in-app alerts and notifications always keep you informed on your finances, so you always stay one step ahead of the curve.
No Penalty CD
With No-Penalty CD, you get the power to earn a competitive fixed rate, plus flexibility. If you need, you can withdraw your entire balance beginning seven days after funding.
With only a minimum deposit of $500, Marcus guarantees great rates and a high rate of return. You also keep all of your earned interest, even if you withdraw early.
Marcus Insights is a premier tool to improve your finances, and Marcus Bank allows any and all users to gain better financial literacy using their app, whether they have an account with Marcus Bank or not.
With Marcus Insights, you bring your financial accounts together into one platform, and the tool offers personalized insights to help you make empowered financial decisions.
By compiling all the data into one easy-to-use, intuitive app, you can better understand how you spend, save, and invest.
Not only can you better see where your money is going, but since Goldman Sachs designs the app, their tools help you see your money-spending habits much more clearly, enabling you to make stronger financial decisions.
Chime is more geared towards people that are less financially robust. If you’re new to building credit, you have poor credit, or you need help saving, Chime has the tools to put you back on the right track.
If you have more assets, Marcus has the tools to help you navigate a more complicated financial situation. If you are juggling multiple loans and accounts, their consolidation loan option makes it easy to lower your loan payments, and their Marcus Insights make it easy to see your spending across accounts.