Wait a second.
I just blacked out a little bit.
How did we go from 4% to 2.79%?
T-Mobile, the third largest cellphone carrier,
is going to try to step their game up just a little bit
by offering, wait for it, high-interest (laughing)
checking accounts.
Drum roll, please.
It's called T-Mobile Money
and they're saying that you can earn up to 4% APY
on your money in that checking account.
Wait, wait, wait.
You're saying that okay, this I weird.
Of course, there's a few strings that are attached
so let's dig into the details a little bit
to figure out if it makes sense for you to open up
one of these T-Mobile Money checking accounts.
Hey, I'm Jarrad and on this channel,
we like to talk all things personal finance and investing.
On the surface, this looks like a really good option
that T-Mobile is offering.
A 4% APY, no account fees,
access to over 55,000 no-fee ATMs,
and the checking account is, of course, FDIC-insured.
Let's break down these four features
so that you understand the fine print
and then towards the end of the video,
I will hit on a few more things that you should know
and give you kind of my final thoughts
on this T-Mobile Money.
But before we do that,
please Hulk smash that thumbs up button
because it kind of helps fill this void
that I've got in my heart
and it helps increase my self-esteem.
When you hear that T-Mobile's offering checking accounts,
your first thought may be well,
are they going to become a bank?
No, not really.
What a long of these big non-bank companies do
is work with a legit bank
that essentially offers the checking account,
just with the branding of that company,
kind of like T-Mobile.
In this case, T-Mobile's partnering with BankMobile,
which is a division of Customers Bank,
which is located in Pennsylvania.
Kind of like what Apple did partnering with Goldman Sachs
to bring you the, of course, Apple credit card.
It's a winning situation for that bank
because they get to partner with a big name,
kind of like T-Mobile.
And T-Mobile gets to leverage their relationship
with that bank to help them offer more incentives
for their current customers to keep them longer
and bring in new customers
that will stay with their service a lot longer.
Two things most Americans don't change very often
is their cellphone carrier or their local bank.
I know that I've been with Verizon
as my primary cellphone carrier
and PNC for my local checking account for many, many years.
T-Mobile is using this offer
to help keep their customers on their platform
since they know you're less likely to try something else
once you're already in that T-Mobile ecosystem.
They won't charge you any fees
if you use an ATM within their network.
Now there's really no strings attached here
unless you use an out-of-network ATM.
But if you do, then you might get charged a fee
by that ATM provider but not by T-Mobile.
They're partnering with Allpoint ATMs.
I don't know who the heck they are but I looked into it
and they have over 55,000 ATMs
spread among the United States.
They are everywhere so you really shouldn't have an issue
finding one of these ATMs in your local area.
If you do open a T-Mobile Money account,
then they will send you a free debit MasterCard.
Just like many regular checking accounts,
there aren't any fees associated
with a T-Mobile Money checking account.
Just a heads up though,
if your current bank is charging you any kind of fees,
then you need to find a new bank as soon as possible,
unless you're just constantly over-drafting the account.
Then in that case, every bank is going to charge you a fee.
With this new account,
T-Mobile offers something called Got Your Back.
If you're a T-Mobile customer who registers for perks
and makes deposits totalling $200
during a single calendar month,
then you have access to receive up to $50 of spending
in overdrafts with zero fees.
All you have to do is make sure that your account balance
is in the positive again by the 30th day
after that account goes negative.
So for example, if you have $300 in the account
and you spend $330 on the third of the month,
then you'll need to make sure that you deposit
at least $30 into the account
by the 30th of that particular month.
If you do that, then you're good.
If you don't, they're going to charge you.
$50, it's not that much.
I feel like it'd probably be easy
to go over that $50 threshold.
Now let's get into the biggest selling point
of this whole thing,
the 4% interest that they're going to offer you.
This is where things get a little bit weird
so you've got to pay attention.
To actually earn the 4% that they're offering,
you need to do all three of these things.
You have to actually be enrolled
in one of T-Mobile's wireless plans.
You have to be registered for perks with your T-Mobile ID.
To be honest with you, I don't know what that means
but it's probably pretty easy to do,
as long as you have a plan with T-Mobile.
And number three, you have to deposit at least $200
every single month.
If you don't meet all of those three things,
then you only earn 1%.
Ew.
I don't get out of bed for 1%.
Another thing that you should know
is that you will only 4% on the first $3,000
in the checking account.
Anything above $3,000 will earn only, once again, 1%.
For example, if you have $4,000 in that checking account,
then you would receive 4% on 3,000 of those dollars
and 1% on 1,000 of those dollars.
On the other hand, if you have $2,000
in this checking account,
then you would earn a 4% return
as long as you were depositing at least
$200 every single month.
But wait, don't go away yet.
There's more strings attached.
They also mention how this is all subject to change
and the APY for this year will range from 4% to 2.79%,
depending on the balance in that account.
Wait a second.
I just blacked out a little bit.
How did we go from 4% to 2.79%?
Because we read the fine print
to figure out what they're actually offering.
So what do I think about this
T-Mobile Money checking account?
I kind of like it.
I can't completely trash it
but only for people who are already T-Mobile customers
or people who are looking to change
to a different cellphone carrier
and that have made sure that they will get good cell service
through T-Mobile in their area.
One thing that kind of makes me a little bit uneasy
is how they have the option
to change the interest rate whenever they want.
Now this isn't to say
that other checking and savings accounts
can't change their rate whenever they want
but let's think about this logically.
Offering you 4% is quite a bit.
Since it is so high,
I don't really think it's very sustainable
to keep that at 4% in the long term.
Because if it was,
then why wouldn't other players out there,
like Ally Bank, have raised their APY this high already?
Another thing is that they only offer this 4%
on the first $3,000.
Then, of course, it drops to 1%,
which is way less than the current 2.2%
that Ally Bank offers.
In my opinion, this is not worth your time
if you're happy with your current cell phone carrier
or you carry an emergency fund that is more than $6,000
because the numbers don't really work out
in your favor if you do.
You're better off opening an online savings account
with Ally and earning 2.2% on all of your money.
Plus, the annoyance of going through the whole process
of moving to a different cellphone carrier,
(coughing) the third-largest cellphone carrier,
doesn't really seem worth your time.
Thanks for checking out this video.
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letting me know your thoughts on T-Mobile Money,
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I'll see you in the next one, friends.
Adios.