You may find tons of options and choices when choosing online cash apps, and pitting SoFi vs Chime is a common happening.
SoFi vs Chime – The Basic Differences
SoFi and Chime, mainly have one key difference when it comes to saving money. SoFi allows you to keep all your savings and checking in one account whereas Chime offers you multiple separate accounts for the same purpose. Choosing Chime means your checking balance will have no interest. However, you get a 0.50% APY (high rate) on the savings balance. SoFi, in contrast, offers 0.25% APY to qualify on your balance whether it is your savings or spending money.
In contrast, you may qualify to earn 0.25% on your entire balance with SoFi, regardless of whether it's spending money or savings.
Making the right decision can be complex and overwhelming if you’re new to the online banking world.
If you can relate to this, you have come to the right place. Here, we have rounded up some essential features of the two most popular online money management or financial companies, SoFi and Chime. A SoFi vs Chime analysis will help you make an informed decision.
Let’s begin by analyzing both options’ features individually.
Chime – What is it and How it Works
Chime is an online-only financial entity that works with two banks. The company offers savings and checking accounts and is different from traditional banking. Note that Chime accounts have FDIC insurance, so people consider them a safe place to keep their money. This online banking doesn’t have any overdraft or monthly fees. It allows you to round up your purchases to a single dollar and helps you save the rest.
The option is best for customers or investors looking to maximize their savings account's interest in an online account. They can pay through direct deposit and can access other accounts to transfer money. This online financial service offers a yearly percentage yielding 0.51 %. It doesn’t have any balance requirements.
Moreover, Chime rounds up all your purchases on a How to load a Chime Card to a single dollar and adds it to the savings account. People can have Chime automatically transfer more than 10 % from their paycheck into their saving account. Additionally, you can load your Chime card through its cash deposit partners, which include Walgreens, 7-Eleven, Walmart and more.
While both these Chime account features are non-compulsory, they are quite handy. You might not get them in other savings accounts. You can avail of other benefits like unlimited transfers using your savings account with Chime. However, you must have a spending account with Chime before you can open a savings account.
SoFi – What is it and How it Works
SoFi is not a bank. It is a financial company that sweeps your funds to its partner banks (six) to insure money federally. With partner banks of SoFi, you can insure up to $250,000. The company offers you plenty of ways to fund your saving accounts.
The digital finance company offers student loans, refinancing options, and investment accounts. The cash management account works as a hybrid saving/checking account. Unlike Chime, SoFi allows its customers to deposit checks through mobile, make a direct deposit, and transfer funds from different accounts.
If you‘re comfortable with digital banking, SoFi can be an affordable option for you to save money. It doesn’t charge any opening deposit and monthly service fee. Plus, you don’t have to pay any overdraft fees or ATM fees (out-of-network). You can access your All point ATMs when traveling abroad.
There is no foreign transaction fee when you use SoFi saving account or make a purchase across the country. But if you use MasterCard, it charges you a 0.20 % fee, and there is no reimbursement for this account.
SoFi doesn’t have any overdraft charges but also has no overdraft protection. That means if a purchase overdraws your account, SoFi denies the transaction.
SoFi vs Chime
As mentioned earlier, SoFi and Chime are the big players in the money management game. Take a look at the critical differences of these apps to understand how they are different.
- Account Type
SoFi is unique and different when it comes to savings and checking accounts. The money management account allows you to obtain savings and check in one account, and earn interest in your saving account's cash.
On the other hand, Chime is the fastest growing bank account in the USA but offers separate savings and checking accounts.
- Interest Rate
With SoFi, you earn 2.25 % APY on your cash. Chime has 0 % APY for your checking and 0.1 % APY for your savings.
As mentioned earlier, with SoFi, you can access any ATM abroad for free. Chime also offers you access to more than 24k in-network ATMs, whereas it charges you a fee when you go beyond the network.
Security is another crucial feature that distinguishes both online money management apps. With SoFi, you can insure up to $1.5 million. Chime, however, offers FDIC insurance up to $250.000.
SoFi or Chime- Which is Better?
When you put SoFi vs Chime, there is one vital difference that sets them apart entirely from each other. SoFi has one account to keep your savings and checking. Chime, alternatively, offers you separate savings and checking accounts.
While the distinction makes them different options, they come with their pros and cons. Chime has no earning interest on checking balance but gives you 0.51 % APY on the savings balance. On the contrary, SoFi allows you to qualify for 0.25 % on the entire credit, whether savings or spending money.
With Chime, it is easy to qualify for a relatively higher APY, and with SoFi, you need to deposit $500 monthly to earn the rate. That means your choice mainly comes down to these options.
- You want two separate accounts or one account for savings and checking
- You want to qualify for the high rate with SoFi each month
Consider your savings account balance when making a choice. If you're going to keep money/cash in a checking account instead of savings, you may want to prefer SoFi. It is because Chime has no interest benefit on the checking account.
If you want to deposit money, prefer Chime as it lets customers deposit money at Green Dot locations, but you have to pay a $4.9 fee.
All in all, Chime accounts offer access to round up savings and direct deposits as extra benefits. SoFi, in contrast to Chime, offers financial planning, full-suite banking services, career coaching, member events, and much more, at no added cost.
As as result, in this SoFi vs Chime comparison, the features stated above give SoFi an edge over Chime. Nevertheless, you must consider your money-saving priorities before making a final decision.