Go Bank and Simple: What Consumers Should Know
By Consumers Union on Wednesday, January 23rd, 2013
We obtained some additional information from Simple about their account. Simple’s Visa card is a prepaid card but the account differs in that it is a hybrid since consumers who have a Simple account do in fact have a traditional checking account with Bancorp Bank. We have made the following changes to our original blogpost to reflect this correction below:
Go Bank and Simple appear to share much in common, including:
- Both aim to attract consumers who are tired of their banks.
- Both focus on mobile.
- Both strive to be less complicated than traditional banks.
- Both have innovative tools to help consumers, such as tracking spending
There is a one significant difference we would like to point to and it is that one is attached to a deposit account and the other is a hybrid, providing both a bank account and a prepaid card.
It’s the same explanation we’ve provided again and again about the differences between a prepaid account and a checking (or deposit) account.
Go Bank’s bank is Green Dot bank and the account is a deposit account, so consumers have the same protections as one would have with a traditional bank account.
Simple’s bank is The Bancorp Bank which issues its Simple Visa Card, a prepaid card. Simple customers also hold a bank account with Bancorp Bank and are issued a prepaid card. Due to this hybrid nature, we were told that consumers have the full protections of consumers who hold traditional bank accounts. Please keep in mind that other
Althou gh prepaid cards function much like debit cards tied to a bank account, but they don’t yet have federally guaranteed consumer protections, such as error resolution.
(Both banks ARE FDIC-insured, so consumers would be insured to the full FDIC limit)
Loading cash into these accounts is quite different from a traditional bank, where you can deposit cash into an ATM or with a teller. This of course has its upsides, in which consumers can go to a number of contracted ATM networks and withdraw cash at no fee or use remote deposit capture to deposit checks instead of going down to a branch or ATM as is the case with traditional banking. But, if one has a wad of cash they would like to deposit or are paid in cash, it isn’t as simple or even possible to do so with Go Bank or Simple. Go Bank allows consumers to deposit cash by using a MoneyPak (up to $4.95) and it’s not entirely clear how one might load cash into a Simple account. (We want to clarify here that by “cash” we mean paper money, not electronic funds).
This goes without saying, consumers should also compare other attributes, especially fees, for these new types of financial products to decide if they will best suit their needs.
Have you tried these new banking services? What do you think of them?