The nation’s third largest wireless network is starting a checking account service.
T-Mobile will launch T-Mobile Money, a banking service available to all consumers beyond its base of cellular customers. Bank Mobile, a digital bank and subsidiary of Customers Bank, is T-Mobile’s partner in this venture.
T-Mobile Money, which extends to consumers beyond the cell carrier’s customers, reflects a trend of tech companies moving into consumer banking. Amazon, for instance, is looking to open its own checking account service with JP Morgan Chase.
Daniel Latimore, senior vice president of banking for Celent, a research and consulting firm, told Bankrate that data attracts companies like T-Mobile into the banking sector.
“The prize at the end of the day is really going to be the data,” Latimore said. “Banks have all this explicit data that they have not yet exploited anywhere nearly as well as Google has. There is an immense opportunity there.”
T-Mobile’s account comes with Federal Deposit Insurance Corporation (FDIC) insurance for balances up to $250,000, a Mastercard debit card, and paper checks that can be sent from its smartphone app.
CNN reports that a typical savings account offers 0.06% annual percentage yield (APY). T-Mobile Money, by comparison, offers 4 percent APY on balances up to $3,000, so long as the account holder deposits at least $200 a month. Above $3,000, the account’s APY drops to 1 percent.
According to Bankrate, opening an account through this service is free with no minimum balance requirements, account fees, maintenance fees, or overdraft fees. Nor does the account charge for withdrawals at more than 55,000 Allpoint ATMs.
One potential drawback of the mobile checking account would be its inability to process cash deposits directly. Mobile deposits can only be made via check or money order.
T-Mobile Money is not the company’s first attempted entrance into consumer banking. In 2014, T-Mobile offered a Visa card for customers to pay bills and deposit cash. It shuttered the service in 2016, however, because it failed to attract customers.
Photo courtesy of T-Mobile.