The battle for Americaās banking customers rages across multiple fronts, but none may be as contested as your cellphone. T-Mobile, one of the nationās largest wireless carriers, is entering the mobile banking arena with T-Mobile MONEY, a fee-free, online high-yield checking account offering an annual percentage yield (APY) of 4.00%.
āAs the [smartphone] becomes more the epicenter of our life, what we realized is that people arenāt just banking online, but from the device,ā said Tiffany Minor, T-Mobileās marketing director of financial services. āThose are our customers and thatās their mobile lifestyle.ā
But can a mobile network really compete with traditional banks and fintech startups when it comes to mobile banking?
The most eye-catching part of the T-Mobile MONEY account is the high interest rate it offers users. The current 4.00% APY puts it right up there with some of the highest-earning checking accounts available.
However, this sky-high APY only applies on balances of up to $3,000 ā the remainder of your money will earn an APY of 1.00%. Also, like with almost every high-yield checking account, the customer has to meet certain requirements to enjoy the highest APY. To get the 4.00% yield, users must:
If you meet the criteria above, you get 4.00% APY on balances up to $3,000 as a reward. Another perk T-Mobile grants to customers who fulfill the requirements for the high interest rate is enrollment in an overdraft protection program called āGot Your Back.ā Members in this program receive a $50 credit each month thatās used to cover transactions that would put your balance in the negative. Customers then have 30 days to deposit enough money in the account to cover the debt.
Thereās no fee associated with this service, or any kind of daily charge for the amount of time you remain in overdraft. However, if you fail to pay after your 30 days are up, T-Mobile promptly boots you out of the Got Your Back program.
āMuch like when you lend money to your brother or sister or friend, if they donāt pay you back youāre probably going to say āNo, Iām not going to do that anymore,āā said Minor. āSame with us.ā
Thereās no mention in the terms of service of any additional overdraft charge, but there is a line explaining a failure to pay an overdraft may cause T-Mobile to āreport this information to outside credit reporting agencies or databases.ā
To be clear, T-Mobile hasnāt transformed itself into a bank with the unveiling of its MONEY account, but is working with BankMobile, itself the online division of Pennsylvania-based Customers Bank, to provide the banking services.
Our sister site DepositAccounts.com, also owned by LendingTree, gives Customers Bank an āAā health rating and the institution has been in business since 1997, so rest assured that T-Mobile hasnāt partnered with some fly-by-night operation.
T-Mobile MONEY lives as an app on your smartphone. āThereās not a lot of [mobile banking] options that actually allow you to sign up and open a bank account on a device,ā Minor said. āThat was important to us as a wireless company.ā
Customers can use the app to manage all aspects of their bank account: check balances, set up a direct deposit, link the account to a mobile wallet and other features common to mobile banking, said Minor.
You also can access the funds in T-Mobile MONEY via a physical Mastercard debit card thatās mailed to you after enrolling. Note that you receive a digital version of this card as soon as you sign up and your account opens, which you keep in a wallet app on your phone.
This debit card can be used at 55,000 Allpoint ATMs around the nation without any fees. T-Mobile MONEY also wonāt charge any fees if you use an ATM outside the network, but it currently doesnāt reimburse you for third-party fees you may incur.
T-Mobileās nationwide offering presents a solid choice for current T-Mobile customers with a qualifying plan. If youāre thinking of switching carriers, the lure of a high-yield checking account may be enough to push you to side with T-Mobile. However, nobody should start shredding their contracts with their current carriers based on this single product offering.
For one thing, thereās no way of knowing how long the high 4.00% APY will last. When asked by MagnifyMoney if this was just a limited-time promotion, Minor emphasized āWe didnāt design [T-Mobile MONEY] as a promotion,ā and that the partnership between T-Mobile and BankMobile was structured in a way to make the high interest rate sustainable.
Still, best intentions donāt come with iron-clad guarantees, and banks change interest rates on products all the time. As they would with any other account, customers should prepare for the terms to shift and not fall in love with a specific rate. But if youāre looking to dip your toes into mobile banking and already qualify for the perks associated with T-Mobile MONEY, you could do far worse.