GoBank is a next-generation checking account for consumers who don’t use a traditional bank. Owned by Green Dot Bank, it’s designed to be used mainly through the mobile app. There are no branches, but you can use ATMs and make some transactions at Wal-Mart.
GoBank can be an inexpensive option for people who don’t have a traditional bank account. You can use many account features for free, including bill pay, ATM access, debit card and mobile check deposits. You’ll need to follow GoBank’s rules carefully, though, to avoid racking up fees.
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GoBank may be right for you if:
- You’re a digital native or are comfortable with the idea of doing most or all of your banking through a smartphone app, meaning you don’t mind the lack of physical bank branches.
- Your credit or banking history might make it difficult for you to open an account at a traditional bank.
- You’re comfortable with paying bills online or via mobile rather than with a paper check.
- Having to go to a Wal-Mart store to make a cash deposit isn’t a problem for you. Other cash deposit options involve fees.
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GoBank pros and cons
| PROS | CONS |
|---|---|
|
You can write checks after pre-authorizing the amount online or via mobile. Limit of $5,000 per day. |
Paper checks are costly at almost $0.50 each. |
|
Two ways to get cash for free: make withdrawals at an in-network ATM or get cash back with a debit card purchase. |
Mobile check deposits can take 10 business days or more to clear. |
|
You can deposit cash for free at Wal-Mart. |
Fee of up to $4.95 for depositing cash at retailers like Rite Aid, CVS or Walgreens. Maximum deposit of $2,500 per day and $3,000 per 30 days. |
At a glance
| FEES OR FEATURES | DESCRIPTION |
|---|---|
| Opening account | $2.95 for starter kit from Wal-Mart; $0 if you sign up online or via mobile |
| Opening deposit | $20 minimum and $500 maximum |
| Monthly fee | $8.95 Waived with direct deposits of $500 per month |
| Cash deposit fee | $0 at Wal-Mart; up to $4.95 at other retailers |
| Free ATM network | More than 42,000 |
| Out-of-network ATM fee | $2.50 |
| Teller cash withdrawal fee | $2.50 at institutions in the Visa or MasterCard network |
| Paper checks | $5.95 for 12 checks |
| Online bill pay | $0 |
| Transaction fees | $0 |
| Maximum balance | $50,000 |
Where GoBank excels — and where it falls short
A key aspect of GoBank is its accessibility. Unlike most banks, GoBank aims to allow almost any consumer who passes ID verification to open an account, without requiring a minimum credit score and a spotless banking history. That can remove a big hurdle for low-income households that have had trouble qualifying for a traditional bank account.
If you have bad credit or a negative ChexSystems history and you’d rather use an app than go to a bank branch, GoBank may be a good option for you. There’s no minimum balance to maintain, and it’s set up so it’s impossible to overdraw the account.
» MORE: Where to find second-chance banking
With GoBank, you get a debit card with all the fraud and purchase protections that banks provide, and you can use it to make purchases and get cash back. You can also withdraw cash at more than 42,000 in-network ATMs for free. If you’re willing to pay the $2.50 fee, you can also get cash at financial institutions in the MasterCard and Visa networks. GoBank also charges a $2.50 fee for out-of-network ATM withdrawals.
There are several ways to deposit money at no charge, including direct deposit, mobile check deposits, bank transfers and adding cash at Wal-Mart registers. You’ll get hit with fees if you add cash at other retail partners, like CVS, Rite Aid or Walgreens, which charge up to $4.95 for the service.
You can write paper checks, although there are a couple of catches. The paper checks cost almost 50 cents apiece, and to write one, you must pre-authorize the amount. It’s more economical to use the free bill pay or person-to-person payment options, although you can make person-to-person payments only to someone who has either a GoBank or a PayPal account.
The GoBank checking account lets you set aside money in a separate Money Vault feature; it doesn’t pay any interest, though.If you attempt to spend more money than you have in your account, the transaction will be denied. You’ll simply get a message saying the payment didn’t go through. Along with GoBank’s bounce-proof checks, that makes it a good option for those who don’t want to risk bouncing a check or running up a bunch of overdraft and nonsufficient funds fees.
Jeanne Lee is a staff writer at NerdWallet, a personal finance website. Email: jlee@nerdwallet.com. Twitter: @jlee_jeanne.
Image via iStock.
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