The financial systems is full of regulations, old-school ideas, and processes for saving money. But thanks to up-and-comers like Acorns, Digit, and now a new banking software called Simple, we have access to better banking and saving methods. I had a chat with Amy Dunn, who’s the lead for the communications department for Simple and how they plan to revolutionize the world of banking.
What is Simple?
Founded in 2009, by Josh Reich and Shamir Karkal, Simple is a newly formed banking software that focuses on reaching financial goals through the creation and tracking of multiple savings goals via their website or mobile app. You start by signing up for a free account, creating a new goal with a custom name/purpose, and then setting up automatic savings transfers starting at $1 or more.
In addition, they offer spending and budget tracking features that allow you to view spending habits to find holes where you could be saving more money. Once you sign up to a free account, you’re given a Visa card that’s attached to your Simple bank account. From there you get access to all their features, including microsavings goals, and the best part is, it’s free.
How Does Simple Work?
Although Simple calls themselves a bank, all the funds in your account are held by their partner bank, BBVA Compass, Member FDIC. Your money is insured by BBVA Compass up to the FDIC maximum (currently $250,000).
Basically they’ve partnered with BBVA Compass, who holds your funds so you can use their banking software for budgeting, goals, and bill-paying features. They look and operate like a bank but still use a partner to process the transactions. Simple’s design is world’s apart of the other banking apps and websites out there.
“Customers who save and budget with our Goals save twice as much as customers who don’t.”
How does Simple make money if they don’t charge any monthly fees? Simple makes money through interest and interchange. The majority of their profits come from interest margin, which refers to the difference between the amount of interest earned on the reinvestment of customer funds in the community and the interest paid to customers for their deposits held.
The second way they earn revenue is through interchange, which refers to the card processing service charge that is paid by a credit network to an issuing bank when a card is swiped.
It’s no surprise that Simple bank’s largest target market falls in the range of 18-35 year olds who are technology savvy. However, they like to refer to their customers as “a group of people who want to interact with their money more intuitively through on-demand, mobile banking. As Simple grows, we’re seeing our customer base spreading across the US, with an age range that spans from 18-82.”
|Mobile App||Yes — Apple iOS and Google Android|
|Web Site Access||Yes|
One unique thing they offer is a deeper look at your “available balance” which doesn’t always tell the whole story. Their “Safe-to-Spend” feature takes into consideration upcoming bill payments, outstanding checks, and pending transactions so you know exactly how much you have to spend without overdrawing your account.
It’s free to open and use a new Simple account. There’s no monthly charge or minimum balance that has to be maintained. And thanks to their new policies put in place September 2015, there are no fees of any kind. Not even an overdraft fee or return item fee.
Simple’s other robust banking features include;
- Safe-to-Spend – Simple’s improvement on the traditional account balance comes in the form of the Safe-to-Spend technology. This is the first thing customers see when they log in to their Simple account — the account balance minus any upcoming bill payments, pending transactions, or savings Goals. Safe-to-Spend gives users an accurate picture of what they can spend today without hurting themselves tomorrow.
- Automated Savings – Simple’s automated savings feature, or Goals, gives users a unique way to save money. Simply set a Goal for a specific expense or purchase and then Simple system automatically puts away a little bit of money every day towards this. You can also create a one-time saving amount using the “Save It Now” feature.
- Customer Service – Simple prides themselves on offering great customer service. Their agents are empowered to work independently to solve problems and aim to do right by their customers. They offer in-app support messaging, Twitter and Facebook agent responders, and a grassroots customer appreciation program.
- Online Bill Pay – You can use the Payments & Transfers features to pay anyone through your online Simple account. Most payees will be issued a check, which arrives to the destination in about 3-5 business days. Other larger businesses can be paid electronically, versus having a check issued. This is a service that’s included with your account so it’s completely free.
- Expense Tracking and Budgeting – Aside from their savings and goals features, another strong option is their Mint-like budgeting section. Each expense is categorized for easy tracking, and you can export your information to a spreadsheet or download the transactions via a PDF.
We’ve created an environment wherein our customers keep 30% of their account balance in Goals. This is more than 6x the national average savings rate of 5%.
Using their mobile app, you can take a picture of a check and have it deposited directly into your account, for a maximum of $5,000 per day (and a per-check limit of $2,000). The funds will be available between 1-9 business days after the deposit is processed. The check deposit maximum is 10 checks per week, or a total of 15 checks per each 30-day period.
Since Simple does not have a physical bank location, how do they process deposits? There are several options: direct deposit is the easiest way
Direct deposit is the easiest way to fund your account. You can also transfer funds electronically from an account at another institution, or deposit a check by taking a photo of it with our mobile app. We can also accept deposits by mail. Cash is a bit trickier, but still possible. The easiest way to get cash into Simple is to get a money order at any USPS, or a local grocery or convenience store, and deposit it with the mobile app.
- Innovative Software - What makes Simple stand out is its simplistic design, desire to help customers have a better banking experience, and the drive to make saving money, well, simple!
- Personal Debit Card - When you open a new bank account with Simple they send you a personal Visa debit card, just like any other bank will. The design is clean and quite striking.
- Simplified Goals - One of the main appeals to using Simple is for saving money to reach specific goals. Once you set up a future goal and allocate a certain amount towards it each month, Simple will deduct this amount out of your Safe-to-Spend amount, which makes savings money super easy.
- Limited Budgeting - While Simple offers categorization and budgeting features that are similar to Mint it's only limited to your Simple bank account. If you have multiple banks and debit cards, Simple won't give you the whole financial picture.
- Online Only - There’s no physical banking location which means everything has to be done online. This can be a pro or con depending on how you prefer to do your banking. For me it’s not a pro because I need a physical location to deposit checks (which clear a lot faster than mobile deposits and don’t have daily maximums).
- Only Offers Software - Simple isn’t actually a bank themselves as the funds in your account are held by their partner bank, The Bancorp Bank. They simply offer the software available to manage your money, categorize expenses, and create/monitor savings.
- Not Available Internationally - Unlike Chase or Schwab, Simple is only available in the U.S. They're focusing on the basics but they plan to expand internationally at some point.
If you’re focused on making sure that saving money is an easy and streamlined process, then Simple’s banking software will help you achieve this. It’s by far one of the most intuitive websites and apps in the banking industry.
I suggest you use Simple in conjunction with your current bank, as some of Simple’s features can be limiting for viewing your overall financial picture, and managing investments.