Review of Level Cash Management Account

Online-only cash management accounts seem to be all the rage these days. Combining high interest rates with no fees, these hybrid accounts offered by fintech companies rather than traditional banks boast advantages of both checking and savings accounts. Generally, the experience is designed for mobile, with convenient access to funds.

One such cash management offering is Level, which offers a debit card and an interest-bearing account via its online and mobile interfaces. To help you determine if it’s the right fit for your banking needs, we’ll cover the pros and cons, including details of how Level operates.

What is the Level Bank account? 

Many accounts marketed as cash management accounts have distinct checking and savings components. However, the Level cash management account is actually a hybrid account, with both account services provided in a single wrapper. Level offers an online-only account incorporating a mobile app, a debit card and an interest-bearing account.

Level currently pays a 0.50% APY on all deposits. On top of its 0.50% APY, the Level account pays unlimited 1.00% cash back on all debit card purchases for accounts that have at least a $1,000 monthly direct deposit. The account offers fee-free access to over 2.3 million ATMs, with worldwide fee reimbursements.

FDIC insurance and partner banks

As with most of its competitor fintech firms offering cash management accounts, Level is not a true bank. It has no state or federal charter. However, it does partner with Evolve Bank & Trust to provide all of its behind-the-scenes banking services. As Evolve is a member of the FDIC, your deposits will be insured up to $250,000.

When you make a deposit with Level, Evolve Bank & Trust is the actual bank that will hold your deposit. Evolve is also the bank that issues the Level debit card, via its license with Visa U.S.A. Inc. 

Level Bank fees and minimums 

One of the main draws of Level is that there are absolutely no minimums and no account fees. No minimum amount is needed to open the account or to earn interest, and there are no monthly maintenance fees or minimum balance fees. Additionally, Level doesn’t charge overdraft fees, foreign transaction fees or add-on ATM fees. In fact, Level will reimburse any outside ATM fees up to three times per month, with a $4 per transaction maximum. 

Deposit and transaction limits

Cash deposits: One of the main drawbacks of Level is that you cannot generally make cash deposits. Level doesn’t have any physical branches and it doesn’t accept cash deposits through any third party either. You can technically mail cash deposits to Level, but the company strongly advises against this. If you do, Level reserves the right to make a final determination as to the amount of your deposit. As this is never a good idea with any bank, you should consider cash deposits a no-go for Level. 

Check deposits: Currently, Level doesn’t offer a way to make check deposits either. However, a mobile check feature should be operational via its app in the near future. At that time, Level will limit deposits to six per statement cycle, with a maximum cumulative remote deposit of $10,000 per cycle. 

ACH deposits: ACH deposits to a Level account are permitted, and are subject to per-transaction, daily and monthly limits. Limits can vary based on a soft credit check and how you manage your account. For new accounts, a daily limit of $500 and a monthly limit of $10,000 are common.

Debit card transactions: Debit card transactions are limited to $5,000 per day, whether or not you use your PIN. ATM withdrawals carry a $300 daily limit. 

Early paycheck direct deposit: If you set your paycheck up for direct deposit, you can receive your funds up to two days before your regular payment date. 

How to open a Level Bank account

You can open a Level account via either the website, at levelbank.com/apply, or through the mobile app, which is available through either Google Play or the Apple Store. 

To start your application, you’ll need to provide your email address and create a password. From there, you’ll need to provide personal and financial information. Level requires you to upload a copy of your government-issued ID to verify your identity.

Level vs. other cash management accounts 

Level has a number of competitors in the online cash management account space. Here’s a look at how it stacks up.

Level vs. Aspiration Spend & Save

• Level’s 0.50% APY is half the best available 1.00% APY from Aspiration: Level’s standard 0.50% APY on all balances is half of Aspiration’s best potential rate. However, to earn that rate, Aspiration customers must jump through a few hoops, including spending $1,000 or more in a calendar month with your Aspiration debit card and upgrading to an Aspiration Plus account, which costs $3.99 per month (or $3.75 a month if you pay annually).
• Level only requires a single account to earn its higher APY: Level pays its flat-rate APY on all balances in its single account. At Aspiration, you must open a combined Aspiration Spend & Save account. Only the balances in the “Save” portion of the account are eligible to earn the higher interest rate.  
• Aspiration offers a wider range of accounts: Level offers a single cash management account. Aspiration offers its own cash management account in addition to investment, retirement and charitable accounts. 

Level vs. Simple

• Simple pays a top-tier yield of 1.20% APY: Although Level’s current 0.50% APY is far better than the average checking account, Simple’s Protected Goals account pays more than twice as much.
• Customers must open two accounts at Simple to earn the headline APY: All Level customers earn the stated 0.50% APY immediately, in a single account, with no minimum balance or other requirements. Simple customers must open both a Simple Account, which pays just a 0.01% APY, and transfer money to the higher-yielding Protected Goals Account.
• Simple offers Protected Goals accounts: If you’re looking for an envelope-type system for assigning money to various savings goals, Simple might be a better match. Level just has a single cash management account, but Simple lets you set up distinct, “protected” accounts for your specific savings goals, such as a vacation, wedding, retirement or whatever else your savings goals are. This money is kept “protected” from your spending account. 

Level vs. SoFi Money®

• Level’s current 0.50% APY is more than double the 0.20% paid by SoFi Money®: Both rates fluctuate, but you’ll earn more than twice as much on your Level account as you can at SoFi Money®.
• SoFi Money® is linked to SoFi Bank, N.A., whereas Level stands alone: SoFi Money® customers can easily transfer funds to the rest of the bank, which contains a wide range of financial services. For example, you can get a student loan, a personal loan or even a home mortgage or insurance products with SoFi Bank, N.A. The firm also has an investment wing, which charges no commissions, allows fractional shares purchases and offers crypto investing.
• SoFi Money® offers unlimited global ATM fee reimbursements: Although Level offers up to $4 in ATM fee reimbursements per transaction, up to three times per month, SoFi Money® has no such restrictions. Any ATM fee, in any amount, incurred anywhere in the world is reimbursed, with no limits. 

Is a Level Bank account right for you? 

Level can be a good option for you if you’re looking for a simple, fee-free cash management account with some minor perks. Currently, the account pays a relatively high APY for a checking account, although it ranks far below top-tier online savings account rates. With no fees on nearly all banking transactions and 1% cash back on all debit card transactions, though, Level checks a lot of boxes.

Any rates and fees mentioned in this article are accurate as of 6/22/2020.