What Can You Expect When Banking With Green Dot Bank?

FT Contributor  | 

Green Dot Bank is an online bank that offers both a checking and savings account for consumers. The financial institution is unique because you open your bank account online and complete transactions either online or through a mobile app. There are no physical banking locations you can visit but the bank is associated with several in-network ATMs that allow you to perform transactions for free.

Green Dot Bank also stands out from other major banking institutions because its accounts are associated with rewards programs and high annual interest rates. If you’re looking for the right bank, it’s important to review the features associated with Green Dot Bank before deciding to open an account.

Green Dot Bank Services

Since Green Dot Bank is an online bank, customers engage in mobile banking and online banking to complete transactions. There are no physical locations to visit but your money is safe in the bank because Green Dot Bank is an FDIC-insured financial institution.

Green Dot Bank only offers two different types of bank accounts for online customers: the Unlimited Cash Back Bank Account and the High-Yield Savings Account. Customers have reported both pros and cons with these accounts.

Unlimited Cash Back Bank Account

The Unlimited Cash Back Bank Account isn’t specifically referred to as a checking account but it offers many features similar to a checking account.

Pros

  • You can spend money directly from your account using a Visa debit card or through free in-network ATM cash withdrawals.
  • There are no fees for overdraft or bounced checks.
  • There’s no minimum balance to open an account.
  • You can deposit money into your account using direct deposit, mobile check deposit, electronic transfers from other accounts, or with cash deposits through select major retailers.
  • You may qualify to get your paycheck up to two days early or your benefits check up to four days early.
  • You can earn cashback in your account on qualifying transactions.

Cons

  • If you don’t spend at least $1,000 or more on qualifying transactions, you’re charged a $7.95 maintenance fee each month.
  • You’re charged $3 per cash withdrawal and $0.50 per balance inquiry at out-of-network ATMs.
  • The teller cash withdrawal fee is $3 and you must pay $5 for a replacement debit card.
  • Foreign transactions fees are 3% of the total transaction.
  • You must pay $5.95 for a pack of 12 checks.
  • You only earn cashback for the rewards program with in-app or online purchases; airline tickets, bill payments, and gift card purchases are excluded from the rewards program.

High-Yield Savings Account

The High-Yield Savings Account offers Green Dot Bank customers a place to keep their emergency or vacation funds.

Pros

  • Green Dot Bank offers a 2% annual interest rate with the account, up to a $10,000 balance.
  • You can perform as many transactions as you need for free, as long as they meet security limits.

Cons

  • You cannot use the account to make purchases or cash withdrawals.
  • Your email address must be verified before you can begin using your High-Yield Savings Account.
  • You must have an Unlimited Cash Back Bank Account to transfer your savings account money into before you can use it for purchases.
  • The 2% annual interest rate is only paid at the end of the year and is based on your average savings account balance for the past 365 days, up to $10,000.

Benefits of Banking with Green Dot Bank

Green Dot Bank customers benefit from many advantages, including the following:

  • Earn rewards: If you’re a frequent online shopper, you’ll be able to earn rewards quickly with your Unlimited Cash Back Bank Account, which can offset your maintenance fees and increase your account balance.
  • Convenient cash deposits: Consumers who come across cash frequently may be hesitant to open an account with an online bank. However, Green Dot Bank makes it easy to deposit your cash for free by visiting local participating major retailers.
  • Online bill pay: With the Unlimited Cash Back Bank Account, you can set up online bill pay for recurring charges. The bank also allows you to send checks directly from your account to companies that don’t accept electronic payments.
  • No minimum balance or overdraft fees: There’s no minimum balance required for the Unlimited Cash Back Bank Account and no bounced check or overdraft fees.
  • Easy online account access: You can download the Green Dot Bank app or log into the bank’s website to check your account balances and complete transactions at any time and from anywhere.
  • 24/7 customer service: You can reach the customer service department by phone or online chat at any time if you have questions about your account.

Drawbacks of Banking with Green Dot Bank

While Green Dot Bank offers a convenient way to manage your money online, there are also drawbacks to opening an account with the financial institution. These disadvantages include the following:

  • High monthly fees: If you don’t spend at least $1,000 in qualifying purchases through your Unlimited Cash Back Bank Account, you’re charged $7.95 per month, which can add up fast.
  • Restrictive rewards: You only earn rewards through your Unlimited Cash Back Bank Account for in-app or online purchases and many spending categories, such as airfare or gift cards, don’t help you rack up cashback.
  • Annual interest on savings account balance: While the annual interest rate for the High-Yield Savings Account is high compared to other banks, it’s only paid once per year and is based on your average account balance. If you carry more than $10,000 in savings, you won’t earn interest on your entire balance.
  • Additional fees: Even if you qualify to waive the monthly maintenance fee, there may be other fees you’re responsible for paying. There are fees associated with foreign transactions, out-of-network ATM transactions, teller cash withdrawals, and paper checks.

How to Apply to Green Dot Bank

You can apply for an account with Green Dot Bank through the company’s website. Once you complete the application and you’re approved for an account, you can download the mobile app to access your account. Your debit card is delivered by mail. You must sign up for an Unlimited Cash Back Bank Account before you can open a savings account.

Green Dot Bank is an online bank that offers convenient service for consumers who prefer online banking. Before opening an account, review the fees associated with certain transactions and the restrictive rewards program to ensure it’s right for you.


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