I was reviewing my old liquid summaries, and I noticed that T-Mobile MONEY Checking account has been included in the summaries with a 1% APY for more than nine months. I first mentioned the account in the summary on October 13th. Amazingly, the 1% APY has held.
Other fintechs haven’t shared this rate longevity. Last October, the fintechs Affirm and Chime were also offering 1% APY. The Affirm savings account maintained 1% APY until December when the rate fell to 0.65%. That rate is still in effect, which is now very competitive for online savings accounts. The Chime savings account rate also fell in December. In that case, the rate fell to 0.50%, and like Affirm, that rate has held.
T-Mobile MONEY - company and rate history
No one knows how long T-Mobile MONEY can maintain a 1% APY. Accounts are held at Customers Bank which has recently lowered its nationwide Ascent Money Market Savings account rate to 0.50%. It seems likely that as T-Mobile MONEY attracts more deposits, the odds of a rate cut will increase. One thing that may help is that the T-Mobile MONEY may attract many small-balance customers who use it as their primary checking account. Small-balance checking account customers who actively use their debit cards can provide a profit for the bank due to interchange fees. However, those fees can only help so much.
T-Mobile MONEY used to be powered by BankMobile which was a division of Customers Bank. In January 2021, Customers Bank spun off BankMobile as a separate company, and the BankMobile name was changed to BM Technologies, Inc. To further complicate things, T-Mobile MONEY is now powered by BMTX, Inc, which is a wholly owned subsidiary of BM Technologies, Inc.
A history of Customers Bank, BankMobile and T-Mobile MONEY is provided in this Financial Brand article, and it highlights the importance of interchange fees for their profits. One interesting reason cited for Customer Bank spinning off BankMobile was the size of Customers Bank and its impact on interchange fees:
It was always Customer’s plan to spin out BankMobile, but the urgency to do so grew because Customers’ crossed the $10 billion asset threshold that had exempted it from the Durbin amendment’s limit on interchange fees.
This suggests that T-Mobile MONEY is able to profit from debit card interchange fees at the same level as small banks (with under $10 billion in assets) even though their partner bank is a large bank (with over $10 billion in assets). These interchange fees must be important in allowing T-Mobile MONEY to be able to pay the high interest rates.
T-Mobile MONEY checking account overview
With a liquid account, at least you’re free to move your money if the rate should happen to fall. Hopefully, T-Mobile MONEY will have many future months of 1% APY ahead. If you’re considering applying for an account, there are things to consider. Here’s an overview of T-Mobile MONEY and the checking account.
Using it as a high-yield savings account
If you’re looking at T-Mobile MONEY as an alternative to online savings accounts, you may only care about the 1% APY and a few important account features, such as the capabilities to transfer money into and out of the account.
The T-Mobile MONEY checking account has no minimum balance and no maintenance fees. Here’s the feature that’s most important for savers: “All customers earn 1.00% Annual Percentage Yield (APY)* on all balances.”
T-Mobile MONEY has an ACH transfer service, but there are small dollar limits. Bank-to-bank transfers are limited to $3,000 per day and a total of $10,000 per month. This information was based on my conversion with a CSR.
The best way to move large amounts of money into or out of this account is to use the ACH transfer service of another bank. Once the account is opened, you’ll have access to your T-Mobile MONEY account number (routing number is 067092886), and you can use those numbers to link it from another bank. Then you can initiate ACH transfers from your other bank without worrying about T-Mobile MONEY dollar limits. Since it’s a checking account, there’s no limit on the number of transfers.
T-Mobile MONEY does not offer outbound wire transfers capabilities.
Using it as a checking account
T-Mobile MONEY has several features that can make it useful to be used as your primary checking account.
You can write paper checks, but they don’t provide free checks. They provide you with three starter checks and refer customers to the third party printer, VistaPrint, for additional paper checks that you can purchase.
The standard online/mobile checking account features are freely available. These include online bill pay, debit/ATM card and mobile check deposit ($3k limit). Checks that are over $3k must be mailed in to be deposited.
There are no refunds of ATM fees that are charged by ATM owners. However, T-Mobile MONEY does not charge out-of-network ATM fees. T-Mobile MONEY is part of the Allpoint Network, which provides free access to over 55,000 ATMs worldwide.
Other features that often appeal to small-balance customers are early direct deposit, in which you receive your pay up to two days early, and an overdraft protection service that is called “Got Your Back”.
High-yield reward checking feature
|4.00*%||-||$3k||T-Mobile MONEY||Checking Account - Qualifying|
|OTHER TIERS: 2.50% → $3k+|
T-Mobile MONEY also has a feature of a high-yield reward checking account. You can earn a 4.00% APY on balances up to $3k when you meet monthly requirements. This $3k balance cap is much smaller than most other reward checking accounts, and thus, it might not be worth the effort for many savers. Nevertheless, it does allow you to earn an extra $90/year ($7.50/month) over what you would earn with just the 1% APY.
The nice aspect of the T-Mobile MONEY account is that you can still earn 1% APY without meeting any activity requirements. Also, the portion of the balance above the cap earns 1% APY. For most reward checking accounts, you earn no interest or a de minimis amount of interest when you don’t meet the monthly requirements.
The T-Mobile MONEY monthly qualification requirements include,
- you are enrolled in a qualifying T-Mobile postpaid wireless plan.
- you have registered for perks with your T-Mobile ID.
- at least 10 qualifying purchases using your T-Mobile MONEY card have posted to your checking account before the last business day of the month.
In the terms and conditions disclosure, I don’t see any “expected use” warnings in which accounts can be flagged when debit card usage is done with minimal purchase amounts to just meet the monthly requirements. The terms do provide some details regarding what’s considered a “qualifying purchase”:
A "qualifying purchase" is a purchase of goods or services made through use of the T-Mobile MONEY Mastercard® Debit Card, whether you use the physical card, the card numbers (as with a "card not present" transaction on the Internet), or an e-wallet like Apple Pay®, Google Pay, or Samsung Pay. Purchases will qualify regardless of whether "debit" or "credit" is chosen at the point of sale.
One potential issue with banking with a fintech is customer support. Fintechs don’t always put enough resources into ensuring high quality customer support. For the case of T-Mobile MONEY, customer support is provided by T-Mobile MONEY Specialists who are available by phone from 8am to midnight every day. I called this morning at 9:30am, and it took 16 minutes before I was connected to a Specialist (that’s on the long side). At least the friendly and fairly knowledgeable Specialist was able to answer my questions.
No joint accounts or beneficiary designations
As is common with many fintech accounts, the account can only have an individual owner. As stated in the FAQs, “Joint accounts are currently unavailable.” Also, according to a CSR, it’s not possible to designate a beneficiary (i.e. POD or ITF) on an account.
Update #2 (7/28/21): I was able to reach the VP of Customer Experience at BM Technologies, Inc. The following is an excerpt of his email which describes the process a family member would need to take to receive funds from a deceased account holder.
In the event of a death of the account holder, we would require a death certificate and any required documentation for the state of residence of the account holder. Once the appropriate documentation is received. Reviewed and accepted, the TMobile Money account would be closed and a check would be mailed to the appropriate individual(s).
I removed the first update to avoid confusion. The previous update was based on my conversation with a T-Mobile MONEY Specialist (CSR). After being on hold for 30 minutes, I was forwarded to a T-Mobile MONEY resolution CSR who handles these types of requests. The CSR was not able to provide any form, and he did not seem too knowledgeable about this issue.
To be eligible to open a T-Mobile MONEY account, the standard banking requirements apply. These include being of legal age, having a government-issued ID, having a Social Security number, and having a street address within the U.S. or Puerto Rico (other U.S. territories are excluded).
The application must be done by either using the website application or by downloading the mobile app from the Apple App Store or Google Play store.
The T-Mobile MONEY checking account is powered by BMTX, Inc., a wholly owned subsidiary of BM Technologies, Inc. The checking accounts are provided by Customers Bank, Member FDIC. Thus, the FDIC considers customers’ account deposits as being held by Customers Bank. Customers Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 3.42% (excellent) based on March 31, 2021 data. The Bank has a DA capitalization grade (C-) that is below average. Customers Bank has originated a substantial number of Paycheck Protection Program (PPP) loans with funding through the Fed’s PPPL Facility. This resulted in a low DA capitalization grade due to an increase of assets without an increase in equity capital or loan loss provisions. Please refer to our financial overview of Customers Bank (FDIC Certificate # 34444) for more details.
T-Mobile MONEY used to be powered by BankMobile which was a division of Customers Bank. In January 2021, Customers Bank spun off BankMobile as a separate company, and the BankMobile name was changed to BM Technologies, Inc.
How T-Mobile MONEY checking account compares
When compared to nationally available liquid accounts (standard checking, savings account or money market account) tracked by DepositAccounts.com, which have no activity requirements or maximum balance limitations, T-Mobile MONEY checking APY ranks first, tied with the M1 Plus Checking account from the fintech M1 Finance (in partnership with Lincoln Savings Bank). It should be noticed that the M1 Plus Checking has a $125 annual fee (first year is free).
The above information and rates are accurate as of 7/26/2021.