No bank branch? Chase says that’s no problem.
Chase JPM, -1.54% on Thursday announced it is expanding its online-only bank called Finn. Finn debuted in St. Louis in October and will now be rolled out nationwide.
The online bank will offer debit cards, and customers will have access to Chase ATMs, as well as “partner” ATMs through Chase. It charges no monthly service fee on checking or savings accounts. (Chase’s traditional checking and savings accounts also have their own mobile banking options.)
Finn’s app allows customers to analyze their spending by rating certain purchases they’ve made. It also allows them to set up saving “rules,” such as making an automatic deposit into their savings accounts every payday. Apps, including Digit and Clarity Money, already have such features.
Many consumers are also worried about overdrawing their accounts, said Matt Gromada, a managing director and the chief product owner of Finn. So Finn debit cards don’t allow customers to overdraw. Instead, cashiers would deny the card at checkout if the balance is too small.
The savings for those consumers could be large: Consumers paid a whopping $34.3 billion in overdraft fees in 2017, according to a report from Moebs Services, a research firm that focuses on financial institutions. (Under the Electronic Fund Transfer Act in 2010, customers must opt into overdraft capabilities.)
Consumers who pay overdraft fees tend to be disproportionately younger and have lower incomes, according to research from the Philadelphia-based nonprofit Pew Charitable Trusts. Fear of overdrawing an account is one reason approximately 10 million U.S. families don’t use a bank at all.
Chase has competition from other online-only banks, including Aspiration, Ally Bank ALLY, -2.02% and Marcus by Goldman Sachs GS, -0.63% Marcus, for example, currently offers 1.8% interest on savings, with no minimum deposit. Finn will offer the same as traditional Chase savings accounts, just 0.01%.
Finn is available on Apple iOS AAPL, -0.15% and will come to Android by the end of the year, the company said.
