Credit Karma Money review
Should you bank with Credit Karma Money?
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Credit Karma Money is a checkings and savings account that offers a modern alternative to traditional banking services. While some may balk at the idea of an online-only bank account, Credit Karma Money has just enough perks and features to attract even the most stubborn consumers. Along with the lack of fees, the service provides customers with a high-yield savings account, the chance to earn cash rewards, and early access to direct deposit paychecks.
The standout perk of Credit Karma Money is its impressive 2.73% annual percentage yield (APY) on a savings account. According to Credit Karma, that's about twice the national average. Whether that’s the case or not, it’s higher than most and a great deal to anyone looking for a place to park some cash.
Compared to the impressive savings account, the companion checking account from Credit Karma doesn’t stand out from the crowd. Opening a checking account with Credit Karma is free, there are no fees, and each purchase is eligible for the change to win a cash reimbursement. But you can find similar low-cost checking accounts from banks and credit unions.
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What is Credit Karma Money?
- Minimum Deposit Amount: No minimum deposit on Credit Karma Save and the Credit Karma Money Spend account is free to open with no minimum balance requirements.
- APY: 2.73 APY
- Fees: None. However, you may be charged a fee if you draw from ATMs out of network.* Insured?: Federal Deposit Insurance Corporation (FDIC) insured
- Services: With the Credit Karma Visa Debit card, which is issued by MVB Bank, you’ll have access to more than 55,000 ATMs in the Allpoint Network. This includes ATMs at Target, Kroger, Walgreens, and CVS.
- Rewards and Perks: Access deposited paychecks up to 2 days early, each purchase is eligible for a chance to win a cash reward
How does Credit Karma Money work?
Credit Karma Money checking and saving accounts are provided by MVB Bank and work the same as most standard banking products. Credit Karma Money Spend is a free checking account and Credit Karma Money Save is a high-yield savings account. You can spend by using a Visa debit from your Credit Karma Money Spend account, and you can build up savings with deposits into your Credit Karma Money Save account.
The only significant difference between Credit Karma Money and services offered by brick-and-mortar banks like Bank of America is that the account is online only so there is no physical bank you can visit for assistance. You can draw cash from ATMs, but this might not be for you if you prefer face-to-face banking.
Who is Credit Karma Money for?
Credit Karma Money is only available to Credit Karma members. Credit Karma Money accounts are good choices for Credit Karma members needing a no-frills checking account and a savings account with a hefty savings rate and don’t mind the lack of physical banking services.
What we like about Credit Karma Money
The lack of fees
With the Credit Karma Money Spend account, there are no inactivity fees, no annual fees, no monthly maintenance fees, and no withdrawal fees. You don’t have to worry about your money getting eaten up by fees with this account.
No minimum balance requirement
Credit Karma Money has no minimum balance requirement., Your balance can go as low as it will go each month and you won’t pay a fee.
The APY is high
Credit Karma Money Save is a high-yield savings account and is a smart way to save for goals such as saving for a house or a car. The 2.73% APY yield on the Credit Karma Money Save account is undoubtedly impressive and stands out from other savings offerings, especially those offered by traditional banks.
Good incentives to save and spend
Credit Karma has added a few perks to incentivize savings and smart spending. The system is called Instant Karma and offers a few randomized chances to earn cash back. When you deposit money into your savings account, you will enter into a monthly draw for the opportunity to win up to $20,000. Additionally, any purchase made with your debit card has the chance to earn a cash reimbursement.
What we don’t like about Credit Karma Money.
Credit Karma Money Spend checking doesn’t stand out
While the Credit Karma Money Spend checking is a solid offering, there are many other no-fee, free checking accounts just like it. And you won’t need to sign up with Credit Karma to join.
The rewards aren’t guaranteed
While the random nature of the deposit and purchase reimbursements and bonuses can be potentially quite generous, we prefer a more reliable and consistent way to earn rewards.
Higher savings rates elsewhere and no membership required
While the 2.73% APY yield on the Credit Karma Money Save account is a significant savings rate, there are higher rates available, and, once again, you won’t need to sign up for Credit Karma to nab those rates.
The lack of fees comes with a catch
One of the much-touted benefits of the Credit Karma Money checking account is its lack of overdraft fees. While on paper, this sounds fabulous, the reason behind it is a bit mundane. The service has no overdraft fees because it does not allow overdrafts at all. The payment will be declined if you attempt to make a payment using your Credit Karma Money account with insufficient funds. While this does prevent you from going into the red, it can result in missed payments, so keep that in mind.
Credit Karma Money Safety and Security
Banking services for Credit Karma Money are provided by MVB Bank, which is insured by the FDIC. The FDIC insures deposits and examines and supervises financial institutions for safety and soundness. Credit Karma Money Spend accounts and Credit Karma Money Save accounts are banking products with deposits insured by the FDIC.
Should you sign up for Credit Karma Money?
Yes. You’ll get an excellent savings rate and a fee-free checking account.
Credit Karma Money accounts are good options if you are looking for an affordable checking account and a high-yield savings account. If you are already a member of Credit Karma and in the hunt for a new checking account or a savings account, definitely give these accounts a look.
The checking account may not stand out, but it is affordable and it may be handy to have it be part of your Credit Karma experience. You can check your checking account balance after looking up your credit score. And if you are looking to get a jump on your savings, the savings rate from Credit Karma Money Save is stellar. You can watch your savings climb as you consider credit recommendations from Credit Karma.
Prices were accurate at the time this article was published but may change over time.