Retail banks used to compete on interest rates and perks, but lately they’re acting like smartphone makers—offering flashy features to lure you onto their platform. Now an elegant, Apple-like standard-setter has entered the market: Simple.
Simple, formerly BankSimple, has a core value of "Don’t Suck." The service has been in the works for a while, and already has thousands of customers on its wait list. Simple doesn’t do any one thing that’s entirely new, but it does nearly everything that’s neat about modern banking, including a transaction history that's easy to search, built-in budgeting and analysis tools, quality iPhone and web interfaces, and, perhaps best of all, Simple has no other service to sell you than straightforward personal banking.
Is Simple worth all the little headaches of a switch? Simple admits that its interest rates are not that different from mainstream banks, so you’re judging primarily on its features and service. And it has a few limitations, including a lack of joint accounts. But the idea of starting over with your money has major appeal. Here’s a feature-by-feature breakdown of the four biggest retail banks and two web-based competitors, using Simple’s ground-up launch as a starting point.
Deep analysis of spending, saving, and budgets
If you do as Simple suggests and use their Visa-stamped bank card as your primary purchasing tool, your spending history will look quite neat and orderly. Purchases and payments will be cleaned up and categorized ("Chipotle" under "Fast Food"), tagged by you using the iPhone app ("#vacation"), and easily sorted by date or size. More than that, you can use Simple to automatically hide money from yourself to make savings goals, and see your "Safe to Spend" amount that factors in upcoming recurring payments and pending transactions.
This one is almost a draw. Personal finance aggregator Mint.com can do lots of impressive analytics with just about any financial accounts—and credit cards, and investments, and so on. Mint has great iPhone and Android apps, can send you text or app alerts about spending, and even handles cash transactions as best it can. Still, Mint can’t literally move savings around for you, and it’s not built in and tied to your main spending card, so Simple still has a slight edge, if you’re all-in on Simple.
Phone-based check deposits
Simple's advertising shows a man photographing a check in a coffee shop for a quick deposit, but it’s only a "Coming soon" feature. Meanwhile, here’s what the competition is offering:
- Citi: Mobile check deposit on iPhone and Android
- Chase: iPhone and Android
- Bank of America: No check deposit yet, but due out soon
- Wells Fargo: iPhone and Android, but limited to "Connecticut, New York, Washington, the San Francisco Greater Bay Area, Nebraska, Kansas, and much of Arizona."
- Ally: Scanner-based check deposits; phone deposits due by end of 2012.
- ING Direct: iPhone and Android
Send money without signing
Simple wants to get customers away from checks. When it’s time to pay bills or pay people back, Simple helps you get their bank details for direct transfers, or instantly pay other Simple members. If you need to send a check, bill-pay style, they’ll do that, too.
Every major bank has a bill pay service. For direct, check-less transfers, there’s third-party option Popmoney. It’s not as neatly integrated as Simple—unless your bank builds it in, like Citi and Ally—but it’s fast and easy. Give Popmoney your bank details, then have it send a text or email to the person you want to send to (or request from). Popmoney handles the number request, the transfer, and charges 95 cents per transaction.
Worry less about ATMs
Simple offers free ATM use through the Allpoint network, and its app can show you how to get to an Allpoint machine nearby. Simple also doesn’t charge you from its side for non-Allpoint ATMs, but doesn’t cover other banks’ fees, in part to encourage customers to move toward less cash and discourage other banks’ fees.
What about the competition’s ATM policies? You’re obviously encouraged to seek out their own ATMs and network partners, with help from mobile apps. Beyond that, the fees vary depending on the amount of money in your account and other factors. Here are some baselines (for U.S. usage):
- Citi: Waived for certain accounts, at least from Citi’s side.
- Chase: First four or all fees waived (from Chase side), depending on account.
- Bank of America: $2 for any non-BoA ATM use (plus owners’ fees)
- Wells Fargo: Two free withdrawals per month with certain accounts, $2.50 per ATM use otherwise.
- Ally: No ATM fees from Ally, and other fees reimbursed at statement’s end.
- ING Direct: Allpoint ATMs (same as Simple) are free, other ATMs incur fees.
Top-shelf interfaces and customer service
Here’s where Simple might have the greatest advantage. Its iPhone and web interfaces are uncluttered, easy to navigate, and lack the sideline pitches for CDs, savings accounts, credit protection, and other margin-boosting services of other banks. There are no heavy Java applets to load, just simple read-outs on what you’ve earned and spent.
Simple also promises real humans responding to messages sent through their web and mobile apps, and better phone support than the major banks. Ally—a rebranded, web-only arm of the General Motors Acceptance Corp.—has a marketing campaign centered on "customer service with a real human being 24/7." Other banks obviously promise similarly stellar service, but, well, you’ve likely dealt with a national bank on the phone before, so this one’s your call.
Should you switch to Simple?
Simple’s strongest pitch is the idea of rebooting your financial life so that your cash flow is much more real and apparent. You can’t overdraft because you’re using a debit card. You’re avoiding ATM fees and check ordering because you’re doing everything with a card and a phone. You’re setting goals, seeing the recurring costs ahead, and stashing away money for future purchases. It’s not a bad idea.
But if you’re not quite ready to make the switch, you’ve seen that other web-based tools are willing to help you simplify your money. And they’re quite cheap, or free, which is really simple.
[Image: Flickr user Christchurch City Libraries]