Is Walmart The Best Online Bank?
Everyone knows that Walmart is a discount department store, and an online retailer as well. But did you know they offer free checking accounts and other banking services? Here's the scoop on the services offered by WalMart's GoBank and other online banks…
Are You Unbanked?
Walmart entered the banking business in October 2014, partnering with GoBank to offer free* checking accounts with online bill payment, a Mastercard or Visa debit card, a U.S. network of 42,000 no-fee ATMs, direct deposits and a mobile image-capture app for depositing paper checks, plus the ability to deposit cash at the cash registers of nearly every Walmart store (Vermont and Wyoming excluded).
Should Chase, Wells Fargo, and other big banks be worried?
Not really; Walmart is not going after customers who need the full spectrum of traditional banking services. GoBank, an FDIC-insured bank since 2012, offers only checking accounts. No savings accounts, CDs, or loans are available. It’s just a place to park money you intend to spend soon. GoBank is owned by Green Dot Corporation, the company that launched the prepaid debit card industry in the year 2000.
The target market of GoBank is the estimated 9.6 million “unbanked” Americans who either don’t want or can’t get traditional bank accounts. GoBank does not check credit histories or the Chex System database of people who have bounced checks. It only verifies account applicants’ identities and residences using Social Security Number and third-party databases. Additionally, GoBank is only for mobile device users; accounts can be accessed only via the bank’s mobile app for iOS or Android smartphones.
Anyone considering a GoBank account should read the bank’s user agreement closely. For example, “free” checking is free only with $500 or more in direct deposits during a given month; otherwise, you’ll be dinged $8.95. Paper checks deposited via the mobile image-capture app are subject to a 10-day hold period. There’s a foreign-ATM fee of $2.50 in addition to any fee charged by the ATM holder, and if you use your debit card to buy from a non-U. S. merchant, a whopping 3% surcharge applies.
Overall, GoBank is not the best choice for online-only checking accounts. Here are some others that are rated higher:
Other Online Checking Account Options
Ally Bank offers interest-bearing online checking accounts, a vanishing breed in today’s banking market. As of this writing, account balances below $15,000 earn 0.10% APR while larger balances earn 0.60%. That’s a pittance, but a bigger pittance than most banks pay.
CapitalOne 360 offers checking and savings accounts. The only potential fee is $25 to stop payment on a transaction. There are no punitive overdraft fees, but a negative balance is charged interest at an annual rate of 11.25%. You can withdraw cash at about 40,000 no-fee ATMS, but there is no way to deposit cash. Photo-deposits of paper checks are accepted.
Simple offers checking and savings accounts. You can create a budget and Simple will tell you how much of your balance is “safe to spend” without running short at the end of the month. Simple also pushes notifications to your phone for all transactions, which can make fraud easier to spot.
Credit unions and community banks should not be overlooked in any search for customer-friendly, no-fee or low-fee banking services. They offer loans, too, often at rates lower than those charged by big banks.
Does an online-only bank appeal to you? Your thoughts on this topic are welcome. Post your comment or question below...
This article was posted by Bob Rankin on 23 Jul 2015
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Article information: AskBobRankin -- Is Walmart The Best Online Bank? (Posted: 23 Jul 2015)
Copyright © 2005 - Bob Rankin - All Rights Reserved