Wireless carrier T-Mobile is getting into the banking market, announcing Thursday (April 18) the launch of T-Mobile MONEY nationwide, a no-fee, interest-earning, mobile-first checking account that anyone can open and manage from their smartphone.
In a press release, T-Mobile said with the checking account customers can earn 4 percent Annual Percentage Yield (APY) on balances up to $3,000, which is 50 times higher than the average U.S. checking account. T-Mobile said the account also comes with a 1 percent APY on every dollar over $3,000. There are no bank or overdraft fees associated with the account.
“Traditional banks aren’t mobile-first, and they’re definitely not customer-first. As more and more people use their smartphones to manage money, we saw an opportunity to address another customer pain point,” T-Mobile CEO John Legere said in the press release. “You work hard for your money … you should keep it … and with T-Mobile MONEY, you can!”
Aiming to take on big banks and the fees associated with traditional checking accounts, T-Mobile said Americans spent $34 billion in overdraft fees in 2017. In the press release, the firm argued that Bank of America Advantage Checking has 19 different types of fees, and Wells Fargo Everyday Checking has 14 different types of fees. T-Mobile MONEY, it said, has no monthly fees, no overdraft fees and no fees at more than 55,000 in-network Allpoint ATMs worldwide. T-Mobile also won’t charge customers for using ATMs that are out of that network.
The wireless carrier said there is no minimum balance requirement. T-Mobile will even let customers go into the red for up to $50 without penalty. Customers will have 30 days to bring the account back into the positive to avoid any fees.
The new service is aimed at keeping customers with the wireless carrier amid fierce competition. It also comes as T-Mobile is trying to get approval for its deal with Sprint. T-Mobile began piloting the new checking account offering in late November, according to media reports at the time.