Rate Leading History of the T-Mobile MONEY Checking Account
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
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 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.
Customer service
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.
Availability
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.
Bank Overview
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.
To search for the top liquid account rates, both nationwide and state specific, please refer to our tables of standard checking accounts, savings accounts and money market accounts.
Second, re the referral to VistaPrint to get checks, I just looked at VistaPrint’s list of everything it does, and about the only thing not on that list is checks.
https://www.vistaprint.com/all-products?xnid=TopNav_See+All+Products_All+Products&xnav=TopNav
For what its worth, you can consider getting checks from checks.com for as low as $5.45 for a box of 100 checks, with free shipping (that is not a first-order discount, that is always their price):
https://www.checks.com/p/836/safety-checks
And yes, no POD accounts taken nixes this account for me.
Could fintechs somehow be excluded from this regulation if it does indeed exist? I doubt it since the underlying institution is an FDIC regulated bank. But we do know that a lot of legal questions about a fintech's operations have yet to be hashed out (which by the way is a reason I avoid them).
However as I have stated before, as fintechs go, I do think that the T-Mobile brand name *might* make this particular one "safer" than the typical fintech as I think T-Mobile would be anxious to avoid damaging its brand.
The link for checks are on the page you provided, look under office supplies and you'll find this link:
https://www.vistaprint.com/marketing-materials/checks?xnid=AllProductsPage_Checks_Office+Supplies_Ma...
25 personal checks for $4, so more expensive per check than the checks.com price you cited.
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.
Your question has a flawed premise. If you die, the financial institution has no say in what happens to your funds unless they are abandoned and then subject to escheat. If the account is in a bank is titled to a single owner, the funds will be distributed by the fiduciary of the estate of the owner (executor, trustee, personal representative, etc.) who will either be appointed in a will or a trust or, if there is no valid will or trust according to the laws of intestacy of the state. The bank does not decide who the assets are distributed to. It's no different than any other asset owned by an estate.
By the way a POA is invalid upon the death of the principal so that has no relevance to this issue.
POD & joint accounts are FI level designations. Estates are outside the FI (in essence they're a stand in for you. So in effect when they decide something it's a proxy for you making the decision). They're two separate things, and legally there's an order in which they're considered.
When you die, what happens to your account depends on how things are at both the FI and estate level. If you have a POD at the FI, that takes precedent over your will or what the estate would determine (unless, in the states that allow it, the heirs of the estate successfully challenge the POD in court). Absent a POD, the estate determines what happens to the account and the FI doesn't have much say in it.
In short if you've already told the FI what should happen (POD) that's what will happen, if you haven't told the FI what should happen (no POD) then it's up to your estate to determine what will happen.
Me: No. Just pointing out how it generally works,
Choice: "And to follow up with Ken’s updated post above and below (much appreciated BTW)…upon confirmation of death the money goes to the state!"
His Update to that update says differently. But even if that was the case, all that usually means is the money ends up in the states unclaimed property department waiting for the rightful owners (you, or in the case of you being deceased, your estate or rightful heirs) to claim it. It doesn't necessarily mean your heirs have lost that money for good.
Check your states unclaimed property website, you might find that you (or a relative) have unclaimed funds sitting there already. I had a rebate from years ago that apparently never made it to my mailbox. Claiming it was easy and they even paid interest on the money while it was in their hands.
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)."
This is standard stuff. The holder of the assets has a right to demand sufficient evidence of the death of the account owner and the legal authority of the fiduciary of the estate. I provide certificates of death regularly in certain circumstances for the estates I manage. It's a very simple process. However, they may not legally withhold distribution of the funds to a legally appointed fiduciary of the estate after establishing that the account owner is deceased. Yes, like anything else, there are cases where there are questions about whether or not the fiduciary has the proper legal authority that might result in litigation. But that is not specific to this financial institution. It's a completely different topic.
It's also another reason why a trust can be better than a will. As a trustee of the trusts I manage, I have signature authority on the trust estates' accounts and have full authority to withdraw funds without any need to establish that the grantor of the trust is deceased. So it is not necessary for me to establish these facts in order for me to make distributions from the estate.
However, a downside, when it comes to banks and credit unions (and fintechs), is that many of them (such as this one) do not accept formal trust accounts. So your options for this type of asset are more limited. Most other asset types including stocks, real estate, etc. can be owned by a formal trust with no problem.
I handled a New York case recently where all of the assets of the grantor's estate were in trust except their car. The attorney wanted to do a small estate probate to handle the cars. But I found a loophole that the lawyer either didn't know about or didn't want to tell me about that allowed cars under a certain value (I think it was $25k but don't remember with certainty) to be retitled to a family member without needing to go through probate.
So the estate avoided the costs associated with the probate and the title of the car was transferred under that provision of NY law.
Nearly every state has a statute authorizing a “small estate affidavit” (and that's usually the name it goes by, in each state). It allows assets that are not included in a will, trust, POD or “designated beneficiary form” - in other words, assets that would otherwise require probate - to pass outside of probate. So if the total of all otherwise probatable assets is less the limit for the decedent's state, no probate is required. (The limits for what constitutes a “small” estate vary wildly by state - https://smallestateaffidavit.com/small-estate-affidavit-limits/ ) Of course, there are some supplementary documents that must be provided with the affidavit, starting with the death certificate.
Frequently vehicles are inadvertently left out of trusts, because the vehicle title will usually have to be updated with the owner being changed to the trust, and usually the state will charge a full “new title” fee for that. Since the date of creation of the trust seldom coincides exactly with the annual title renewal, the owner is often advised to wait until time to renew to make this change. Sometimes they forget.
After this mishap I keep the card deactivated. Aa mentioned before you can deactivate the card at anytime online.